Japanese drug maker buys Shire in $80.5-billion deal

TOKYO — Japanese drugmaker Takeda has agreed to buy Shire for 46 billion pounds ($80.5 billion Cdn) in cash and stock, one of the biggest deals ever in the pharmaceuticals industry, the companies said Tuesday.

Takeda will pay the equivalent of 49.01 pounds ($85.77 Cdn) in cash and stock for each share of Shire, based on Takeda’s closing share price on April 23, the day before a preliminary deal was announced.

Shire gives Takeda a larger presence in the U.S. and expertise in rare diseases, an important area for pharmaceutical companies as patents on established drugs expire. Even though Shire’s headquarters are in Dublin, it earns more than two thirds of its revenue in the U.S. on drugs such as Adderall, which is used for ADHD.

Takeda has, like many Japanese companies, been expanding overseas to compensate for slowing growth at home. Last year, it bought Ariad Pharmaceuticals of Cambridge, Massachusetts. Takeda is valued at $44 billion Cdn and makes almost half of its sales in Asia, and a third in the U.S. Among its top sellers are Entyvio, used to treat ulcerative colitis, and cancer drug Leuprorelin.

The deal recognizes “the strong growth potential of our leading products and innovative pipeline,” Shire Chairman Susan Kilsby said.

The share price of both rose on the news — Shire’s by 3.6 per cent to 39.96 pounds, and Takeda’s by the same rate to 4,638 yen.

Takeda obtained a $40 billion Cdn bridge loan to help finance the deal, a fact that had unnerved some investors before the deal’s announcement. Takeda pledged Tuesday to quickly reduce the debt and maintain the company’s investment grade credit reading.

“Shire’s highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda,” said Christophe Weber, Takeda’s president and CEO.

Shareholders of Takeda and Shire will each own 50 per cent of the merged company. The company will trade in Japan and New York. The companies expect to complete the deal in the first half of 2019.