Takeda seals the deal for Shire in face of concerns over £40bn debt
THE £46bn merger between Shire and Takeda has won approval from shareholders, paving the way for the deal to be completed as early as January and creating one of the biggest pharmaceutical companies in the world.
More than 88pc of shareholders in Japanese company Takeda voted in favour of the acquisition, defying speculation that investors would reject the controversial deal. Anglo-Irish Shire, meanwhile, received the backing of more than 99pc of its shareholders.
The deal will be the largest ever foreign takeover by a Japanese firm and will rank among the 10 biggest acquisitions ever in the pharmaceutical sector.
The tie-up will create a drugs powerhouse with close to £22bn of annual sales, roughly equivalent in size to AstraZeneca.
Japanese investors have been wary of the deal, not least because of the huge amount of debt Takeda has to take on to fund the acquisition. Adding Takeda and Shire’s debt together, along with the extra capital that will be needed to fund the cash element of the purchase, will leave the company with a debt pile of more than £40bn, nearly five times the projected annual profits of the merged group.
But Takeda’s boss, Frenchman Christophe Weber, the first non-Japanese chief executive in its 237-year history, said it would create billions of dollars in cost savings and a diverse pipeline of potentially lucrative drugs.
Mr Weber, who was hired by Takeda in 2014 to expand the typically conservative company beyond its domestic market, said he expected to cut the debt pile over the next five years, in part by selling off $10bn (£7.83bn) worth of “non core” assets.
He said: “With shareholder approval secured, we are looking forward to closing the acquisition in the coming weeks to create a more competitive, agile, profitable, and therefore more resilient company, poised to deliver innovative medicines and transformative care to patients around the world.”
The enlarged group will derive three-quarters of its income from five areas: gastrointestinal, oncology, neuroscience, rare diseases and plasma-derived therapies.
Mr Weber said Takeda would benefit from Shire’s presence in the US, while Shire would gain access to Takeda’s markets in Russia, Brazil and Japan. The company will have a dual listing in New York and Tokyo.
Takeda’s shares have fallen around 25pc since the start of the year amid uncertainty around the deal. Some analysts have previously said its reasons for acquiring Shire are “beyond confusion”.
A group of around 130 former associates of Takeda and other private shareholders even formed a campaign called “Thinking about Takeda’s Bright Future” to convince shareholders not to back the move.