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Takeda receives shareholder approval for Shire Megadeal



Shareholders of Takeda Pharmaceutical Co. voted for their mega deal to buy Europe's Shire PLC on Wednesday. An opposition campaign was attempted in an attempt to prevent the largest acquisition of a Japanese company overseas.

At least 88% of the votes cast had been cast, according to Takeda, against a group of long-standing shareholders who had stood up to block the merger of cash and stock, valued at about $ 58 billion today. The dissidents argued that Takeda paid too much for Shire and overpaid much of his debt.

The election was a resounding victory for French-born chief executive Christophe Weber, one of the few foreigners to head a large Japanese company. The acquisition of Shire would allow Takeda to tap into the lucrative rare disease market and strengthen Weber's mission to expand Takeda's presence beyond its weakening home market.

Healthy Appetite

Takeda's deal for Shire is the largest acquisition of a Japanese overseas corporation.

Japan's Top Five Outbound Deals

Target (Land)

Shire (UK)

ARM Holdings (UK)

Sprint Nextel (US)

Gallaher Group (UK)

Beam (US)

Acquirer

Takeda Pharmaceutical

SoftBank

Japan Tobacco Suntory

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2018

2016

2012

2006

2014

2014

Japan's top outbound stores

2018

2016

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2014

Destination (Country)

Shire (UK)

ARM Holdings (UK)

Sprint Nextel (USA)

Gallaher Group (UK)

Beam (US)

Acquirer

Takeda Pharmaceutical

SoftBank

SoftBank

Japan Tobacco [19659026] Suntory

Japan's Top Five Outbound Offers [196590] 45] Announced

2018

2016

2012

2006

2006

Destination (Land)

Shire (UK) [19659043] ARM Holdings (UK)

Sprint Nextel (US)

Gallaher Group (UK)

Beam (US)

Acquirer

Takeda Pharmaceutical

SoftBank

SoftBank

Japan Tobacco

Suntory

Japan Outbound Deals

Deal

Value *

58B $ †

31.8

21.6

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Target (Land )

Shire (UK)

ARM Holdings (UK)

Sprint Nextel (USA)

Gallaher Group (UK)

Beam (USA)

Acquirer

Takeda Pharma.

SoftBank

Japan Tobacco

Suntory

The deal is subject to the approval of Shire shareholders to meet in London on Wednesday.

The acquisition drives 237-year-old Takeda into the big leagues, making the combined unit the world's eighth-largest drug manufacturer by revenue. It reflects how the Japanese Titans strive for growth abroad. Businesses are estimated to achieve half of their sales in the US, compared to one third that Takeda now achieves. Takeda estimates that the annual savings would be at least $ 1.4 billion three years after the merger.

Mr. Weber has previously upset the shareholder base and cut jobs to consolidate research and hire other non-Japanese executives. But the acquisition of Shire has been his bold move since taking over reins in 2014.

As a sign that Japanese traditional companies are looking to Japan overseas, Takeda increased its bid four times after Shire's board had agreed in May Cash and cash at some -stock offer, which valued it at £ 49.01 or 66.21, a stock at that time, a premium of 65% over the closing price of Shire before the news of the deal came out in late March.

Takeda rated Shire $ 62 billion at that time. Currency fluctuations and a decline in Takeda's share price mean the daily value is $ 58 billion. This is SoftBank Group Corp. still holding $ 32 billion in the acquisition of UK's ARM Holdings PLC, the largest acquisition to date of a Japanese company overseas.

On Wednesday, Takeda's stock closed 1% lower than its closing price on Tuesday, although it fell 25% since news of the first bid appeared at the end of March. Shire shares have gained more than 50% over the same period.

Critics argued that the acquisition saddles Takeda with debt. The company has announced that it will spend about $ 31 billion to finance the deal, which is five times its net debt before interest, taxes, depreciation and amortization. The higher the rate, the less chance there is for lenders to lend, which limits the ability of the company to borrow in the future.

Shareholder group members argued that Takeda had paid too much for a rare-disease target whose top-selling hemophilia drugs face fierce competition from a US-recently ruled Roche Holding AG rival.

The no-activists, who described their group as TTBF or "Think About Takeda's bright future," have hired a former UBS Group AG analyst to lobby American institutional investors to vote against the deal. In recent weeks, the group has won another prominent shareholder, a former Takeda chairman who was the last member of the founding Takeda family.

At a New York lunch in late October, former UBS analyst Shigeru Mishima warned 20 institutional investors, mostly US hedge funds, of the risks associated with the deal. "I said," What will happen in three years, when the risks associated with hemophilia treatment affect? ​​"He said.

Mr. Mishima said the group was disappointed with the vote on Wednesday, even though they knew that they would probably not reach the third of the votes needed to stop the deal.

Mr. Weber said in a statement that he was pleased that the shareholders had supported the acquisition. The CEO said he is working to "create a more competitive, agile, profitable, and therefore resilient company."

The test for Takeda, the analysts say, will be the ability to integrate and expect Shire's empire with his own. A downsizing would lead to a backlash in Japan.

Several prominent foreign CEOs in Japan have concluded that their terms end in controversy or scandals. Most recently, Carlos Ghosn was ousted as chairman of Nissan Motor Co. after he was arrested in Tokyo for suspecting his under-compensation in financial reports. Mr. Ghosn, according to Japanese public service broadcaster NHK, denied wrongdoing and was not formally charged.

Weber told the Wall Street Journal in 2014 that when he came to Takeda, he sought advice from French-trained Mr. Ghosn in Paris. Mr Weber said the speech assured him that he would rise to the challenge of growing in the Japanese island culture.

Contact Preetika Rana at preetika.rana@wsj.com


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