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Japan's Takeda to buy Shire for record $62.5B

Japan's Takeda to buy Shire for record $62.5B”

Japan's Takeda Pharmaceuticals clinched the $62 billion acquisition of Shire (SHPG) early Tuesday after a six-week tussle between the two companies in which Allergan (AGN) also was briefly interested in a possible merger. The pharmco's shares have lost more than 12 percent of their value over the past year, as compared with about a 3.6-percent gain in the Footsie.

Immediately following completion, Shire shareholders will own approximately 50 per cent. of the combined group. Takeda's offer excludes Shire's oncology business-which Shire on April 16 agreed to sell to Servier for $2.4 billion. According to MarketBeat, Shire now has a consensus "buy" rating and an average price target of 4,585.75p. Takeda's research and development also includes vaccines.

The combination merges Shire's portfolio of treatments for rare diseases with Takeda's for cancer, gastroenterology and neuroscience.

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The deal is still subject to regulatory approvals as well as to the approval of Shire and Takeda shareholders, though Shire directors "intend to recommend unanimously" that its investors vote in favour of the acquisition.

Those savings, coupled with increased cash flows, will be important to help Takeda achieve its goal of quickly paying down some of the large debt burden it will take on to pay for the deal.

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

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The deal - assuming it wins backing of shareholders - will be the largest overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.

Takeda had previously said that expanding its oncology business was a significant reason why it was considering a bid for Shire, along with the desire to expand in along with gastrointestinal medicine and neuroscience.

Drugs firm Shire (Xetra: S7E.DE - news) has agreed on the terms of a £46bn takeover by Japan's Takeda in one of the sector's biggest ever deals.

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The deal is by far the largest acquisition of a foreign firm by a Japanese company, dwarfing SoftBank Group's 2016 acquisition of Britain's ARM Holdings in a $24.3 billion deal. Previous year it bought Ariad Pharmaceuticals of Cambridge, Massachusetts. That deal, Shire said today, is expected to close in the second quarter or third quarter, with the net proceeds meant to be used to repay debt.



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