Takeda Pharmaceutical agreed Tuesday with London-listed Shire for £ 45.3 billion ($ 61.50 billion) after the Japanese company raised its cash contribution to $ 30.33 to receive a referral ,
Shire investors receive $ 30.33 in cash and either 0.839 new Takeda shares or 1.788 Takeda ADS for each share, the companies say, and estimate the offer at £ 48.17 per share based on the current price and exchange rate.
Shire's shares, which traded around £ 10 below Takeda's bid, opened 5.5% at £ 40.65, still well below the agreed price, indicating that shareholders still had reservations to have.
The deal – assuming he wins shareholder support – will be the largest overseas acquisition by a Japanese company, and will move Takeda, led by Frenchman Christophe Weber, into the top ranks of global drug companies.
"Together, we will play a leading role in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases, and plasma-based therapies," he said.
Weber became Takaka's first non-Japanese CEO in 2015 and has been looking for acquisitions to make the company more global and reduce its exposure to a mature Japanese pharmaceutical market.
Buying Shire is a great financial gain for Takeda, but Weber believes it will generate substantial cash flow that will allow the extended group to pay off their loans quickly.
Takeda expects significant cost synergies of at least $ 1.4 billion.
Takeda said it intends to maintain its investment grade rating with the aim of achieving a net debt to EBITDA ratio of 2.0 or less over the medium term.
The compound is also one of the largest ever in the pharmaceutical industry, culminating in frantic, month-long negotiations as major players seek to improve their pipelines.
Shire said last month that it would be ready to recommend an offer from Takeda after it had rejected four earlier approaches.
Shire shareholders will own about half of the combined group after the deal.
(Report by Paul Sandle and Ben Hirschler, edited by Kate Holton)