M&A

Takeda closes in on a final $64B deal to buy Shire, starts to consider divestitures — reports

Takeda appears to be just hours away from completing a deal to buy Shire $SHPG at 49 pounds per share, creating a new top-10 pharma giant to contend for the world’s drug market. Nikkei Asian Review says the formal bid now expected will amount to 46 billion pounds in cash and stock — about $64 billion — in line with the latest preliminary numbers offered by Takeda.

Christophe Weber

As Bloomberg reports, the preliminary deal isn’t finalized and may yet be delayed or derailed. But Takeda CEO Christophe Weber has been relentless in his pursuit of Shire, undeterred about questions regarding Shire’s pipeline and its portfolio, which has come under heavy pressure from rivals.

Moody’s has also threatened to downgrade Takeda’s credit rating, which would violate Weber’s oath to avoid any takeover that would mar its credit score. A buyout like this would require a big boost in debt, which Moody’s doesn’t like. “This huge acquisition bodes a spike in leverage that could result in a multi-notch downgrade,” Moody’s Analyst Yukiko Asanuma said April 25.

If the deal is completed, as appears likely, the new company would have to sort out a combined structure with a heavy R&D presence in Boston/Cambridge. According to the Bloomberg story, Takeda — which has been a frequent dealmaker over the last two years — is looking at selling off some assets after the buyout goes through.

Shire’s shares are up 3% mid-day, leaving the market cap at about $49 billion. Takeda’s stock is down 25% in a little more than two months as investors fretted over how this would play out if the smaller Japanese company prevailed.


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