Shareholders at pharmaceutical giants Shire and Takeda agree £46bn takeover

Posted on 6 Dec 2018 by The Manufacturer

The deal between Takeda and Shire will make Takeda one of the ten largest pharmaceutical companies in the world.

Innovate UK has up to £10m to invest in projects that develop medicine manufacturing methods - image courtesy of Depositphotos.
Shire manufacture Mesalazine and Adderall. The drug Adderall is commonly used in the USA to treat ADHD sufferers – image courtesy of Depositphotos.

Japanese company Takeda has had its £46bn takeover of pharmaceuticals giant Shire agreed by the shareholders of both companies.

The deal, which first came to light in April this year, is reportedly the largest acquisition ever made by a Japanese company. Takeda will now become one of the 10 largest pharmaceutical companies in the world and have access to Shire’s lucrative rare diseases portfolio. It will also gain a larger presence in the US pharmaceuticals market.

Cost savings of at least $1.4bn (£1bn) are expected, of which more than 40% are expected to come from merging Takeda and Shire’s R&D operations. Job losses are also expected. Back in May, Takeda’s chief executive said that about 6-7% of the total workforce could be made redundant.

London-listed Shire manufacture drugs including Vyvanse, the anti-inflammatory drug Mesalazine, and Adderall. The latter is commonly used in America to treat people with ADHD. The company’s products are sold in more than 100 countries, and employs about 24,000 people worldwide.

In the past few years, Shire has been on a buying frenzy. Three years ago, it bought NPS Pharmaceuticals for $5.2bn. It also purchased Dyax for $6.5bn the same year. But its most expensive acquisition came the following year when it acquired Baxalta for $32bn.

Back in April, Takeda Pharmaceuticals had a number of bids for Shire rejected by the Dublin-based company. They eventually agreed to a deal on 8 May, subject to shareholder approval. The acquisition still has to be finalised, but it is expected to happen on 8 January next year.

On Tuesday, Kazuhisa Takeda, who is part of the firm’s founding family, voiced his opposition to the deal over fears surrounding the high levels of debt the company would accrue. To counter those worries, Takeda has stated it would fund the takeover with around £24bn in bank loans and around £25bn in a Shire rights issue.

Shire was founded in Basingstoke, Hampshire in 1986 by four entrepreneurs: Harry Stratford, Dennis Stephens, Peter Moriarty, and Geoff Hall. The company’s headquarters moved to Dublin in 2008. But it still retains its UK operations in Basingstoke. It first listed on the London Stock Exchange in 1987. In 2017, the company’s revenue totalled $15.2bn, with a £395m profit.

Aside from Adderall, Shire also manufactures 3TC and Zeffix, which are used to treat HIV/AIDS, and Fosrenol, which treats those with renal disease.

Reporting by Harry Wise