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Takeda receives green light for Shire takeover

26 April 2018

Takeda has been aggressively buying pharmaceutical companies in Europe and the United States. The American drugmaker, which is largely run from Lexington, Massachusetts but has a legal address in Dublin, sold its oncology business recently, but that accounted for a mere 1.8 percent of revenue.

Rare disease specialist Shire lost 2.6 percent after it said it was willing to recommend a sweetened $64 billion offer from Takeda Pharmaceutical.

The deal would eclipse SoftBank Group Corp.'s 2016 purchase of British semiconductor designer ARM Holdings for 24 billion pounds - the largest foreign acquisition by a Japanese company.

Takeda believes the new proposal represents "a highly compelling opportunity for Shire shareholders, which reflects a further increase in value and a material increase in the cash component of the consideration mix". The companies went on to complete a $32bn merger the following year.

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Shire had previously rejected Takeda's acquisition proposals, saying the offers "undervalue" its pipeline and potential for growth.

The two companies have until May 8 to reach a final deal, they said. Shire has declined to comment further.

It would be by far the biggest-ever biotech deal in state history - about three times the size of Sanofi SA's purchase of Genzyme in 2011 for $20.1 billion - and one of the largest corporate takeovers of any kind in MA. It announced an offer to acquire TiGenix NV, a Belgian maker of stem-cell therapies, for €520 million ($645 million) in January, as well as a $150 million initial payment to Denali Therapeutics Inc. for a partnership to develop drugs for neurodegenerative diseases. The stock rating was maintained by Bank of America with "Buy" on Monday, February 5. The Shire deal would radically accelerate that shift, adding more than $9 billion in US revenue. Shire made the announcement without the consent of Takeda. His philosophy propelled the company onto its continent-straddling path as it acquired US biotech business Millennium Pharmaceuticals in 2008 and Swiss drugmaker Nycomed in 2011. It also gives time for the whole thing to be abandoned.

Shire didn't disclose the financial terms of Tuesday's proposal but said it is considering its position.

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Shire plc, a biotechnology company, focused on serving people with rare diseases and other specialized conditions worldwide.

"It was complicated to take an inherently old, conservative Japanese organization" and get it to understand the world had changed, he said. With huge pricing pressures and slashing of prices on blockbuster drugs, Japan runs the risk of multinational companies redirecting their investment in drug development elsewhere.

Shire has always been seen as a likely takeover target.

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Takeda receives green light for Shire takeover