Shire share price rallies as pharmco agrees £46bn deal with Takeda

Shire PLC

Shire PLC

Takeda Pharmaceutical will pay $62 billion to acquire rare disease biotech Shire, securing on Tuesday a deal that will create one of the world's largest drugmakers by sales and transform the 237-year-old Japanese company.

Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda ADSs for each share, the companies said, valuing the offer at £48.17 a share based on the latest price and exchange rate.

Shire shareholders will own about half of the combined group after the deal, which will be the biggest in the sector since 2000 if approved by shareholders.

"Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda", Weber said in the statement.

Shares in the FTSE 100 listed company rose by 5% n early trading but remain well below the offer price, indicating that Shire shareholders still have reservations about the deal.

Takeda has agreed that up to three Shire directors will join the company's board once the acquisition is completed.

The Japanese drug maker increased its bid for Shire multiple times over the past month.

Shire focuses its research on discovering therapies for rare diseases, although the Irish company is well-known for its attention deficit hyperactivity disorder drug Adderall.

The move comes after UK-listed Shire, a rare disease specialist, had rejected Takeda's advances four times since late March.

Under CEO Weber, Takeda has looked outside of its home market for opportunities to expand in its core areas of gastroenterology, cancer and neuroscience. Takeda is valued at about $34 billion and makes nearly half of its sales in Asia, and about a third in the U.S. Among its top sellers are Entyvio, used to treat ulcerative colitis, and cancer drug Leuprorelin.

Takeda, which has seen its market value slide to US$34 billion since announcing its interest, is taking over a much bigger rival. Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011. Last year Weber bought US cancer specialist Ariad Pharmaceuticals for $5 billion.

The combined company will be headquartered in Japan, with an expanded presence in the USA -where Shire and Takeda both maintain significant R&D operations that have grown in recent years-and "major" regional locations in Japan and the US, as well as in Singapore and Switzerland.

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