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It's Official: Takeda Reaches Agreement To Acquire Shire For $62 Billion

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It's Official: Takeda Reaches Agreement To Acquire Shire For $62 Billion
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Initial reports of a pending M&A deal involving Shire PLC (ADR) (NASDAQ: SHPG) dates back to late March, when The Wall Street Journal reported that Japan-based Takeda Pharmaceuticals was interested in the Ireland-based pharmaceutical giant. The two companies reached a merger agreement Tuesday.

What Happened

As part of the merger agreement, Shire shareholders will be entitled to receive $30.33 in cash for each Shire share owned and 0.839 shares either 0.839 new Takeda shares or 1.678 new Takeda ADSs, according to Takeda. The transaction has been approved by both companies' boards and values Shire at around $62 billion.

Why It's Important

The rationale of the transaction is fivefold, the companies said in a press release:

  • Combining complementary positions in gastroenterology and neuroscience.
  • Creating a global giant based in Japan with an attractive geographic footprint.
  • A robust and modality-diverse pipeline.
  • Enhancing Takeda's cash flow profile.
  • Maximizing value from the combination of Shire.

"We firmly believe that this combination recognizes the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve," Shire Chairman Susan Kilsby said in the statement.

What's Next

Takeda and Shire expect the transaction to close in the top half of 2019; upon completion, Takeda shareholders will own around 50 percent of the combined entity.

Shire's stock was up about 1 percent to $163 in Tuesday's pre-market session.

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