Takeda shareholders grant approval for $62bn Shire takeover

Christophe Weber, the Takeda Pharmaceutical chief executive, has faced a string of challenges in his $62 billion pursuit of UK drug maker Shire.

The Japanese company’s shares have tumbled, dissident shareholders complained and Shire repeatedly rebuffed his bids before agreeing to a deal.

Now the Frenchman has scored a big victory with Takeda saying the deal received support from at least 88 per cent of votes at a special shareholders’ meeting yesterday in Osaka. That clears one of the last hurdles for the biggest acquisition announced globally this year. Shire’s shareholders were due to vote later and if they approve the deal, it will be on track to close on January 8.

Mr Weber is now poised to head one of the world’s biggest drug makers with lucrative therapies for rare diseases and a sizeable footprint in the US. But it also leaves him managing more than $30bn in additional debt, and he faces pressure to ensure that the 237-year-old company holds on to its Japanese heritage even as it looks overseas for growth.

Takeda shares have fallen 24 per cent since the Japanese company announced its interest in Shire in March. Shire, meanwhile, has seen its shares rally, jumping 48 per cent since March 27.

The cash flow from the deal gives Takeda three to five years of added time to build up its own pipeline of experimental drugs, most of which are still in the early stages of development, said Fumiyoshi Sakai, an analyst at Credit Suisse.

“Takeda is buying time,” Mr Sakai said. “In that sense, Shire is the perfect match to fill in the gap. Now is ¥7 trillion [Dh227.47bn] worth five years? That’s yet to be seen.”

A group of Takeda shareholders campaigned against the Shire deal. Its members said they are primarily concerned with the financial risk of the added debt, as well as the impact on earnings and the company’s dividend.

Some argued that Takeda would no longer be a Japanese company if the deal went through, although the combined company’s headquarters will be in Japan.

Takeda will benefit from a greater presence in the US, the world’s largest pharmaceutical market. Its portion of sales there will grow to 48 per cent of revenue from 34 per cent after it completes the purchase.

“The expansion of Takeda’s US footprint is a big part of the rationale for this deal,” said Morningstar analyst Karen Andersen. Many of Shire’s products, particularly plasma and rare disease therapies, are sold to hospitals, which could give Takeda more leverage with negotiations for some of its own products.

The combined company is also expected to benefit from $1.4bn in annual cost savings by the third year.

The acquisition is the largest ever overseas deal by a Japanese company. Shire has headquarters in Ireland as well as an operational hub in the US. Takeda will have to integrate a new business with a wide geographic reach and varied therapeutic areas to match its own style.

“Takeda and Shire have very different cultures,” said UBS analyst Atsushi Seki. “So talent retention and the cultural merger between Takeda and Shire will be very important.”

The combined company is expected to benefit from $1.4bn in annual cost savings by the third year