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Takeda wins $ 62 billion deal to buy Drugmaker Shire

Takeda Pharmaceutical Co. has entered into an agreement to purchase a larger rival Shire Plc for around £ 46 billion ($ 62 billion) in a deal that makes it a top drug manufacturer in the lucrative rare disease business The United States

Japanese society cut a lengthy persecution by agreeing to pay Shire 49.01 pounds of stock and stock based on Takeda's closing price on April 23, a statement said Tuesday. In pounds, this is the same value as a preliminary agreement that companies reached last month.

To help finance the cash portion of the business, Takeda said it has secured a $ 31

billion bridging loan with JPMorgan Chase Bank NA Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd., among others. Shire's shares rose 5.7 percent in London on Tuesday, while Tokyo's Takeda rose 4 percent before the deal was announced.

The takeover would have been the largest ever for a Japanese company and could have ranked Takeda in the top 10 pharmaceutical giants worldwide. Chief Executive Officer Christophe Weber, the first foreigner to run the 237-year-old Japanese company, seeks growth in new markets amid patent lawsuits and drug pricing pressures at home.

Bigger Pharma

Takeda and Shire together $ 31 billion Revenue is in the top 10 in the industry

Source: Bloomberg, based on the submissions of companies for the last fiscal year

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

Takeda needs few experimental late-stage drugs that are in its own pipeline, and needs lucrative new therapies. A Shire acquisition brings Takeda treatments for rare diseases such as hemophilia – a field that attracts a growing number of drug manufacturers who may demand more for unique life-saving medicines than for routine treatment.

The deal increases Takaka's exposure to the US, the world's largest pharmaceutical market. Headquartered in Lexington, Massachusetts, Shire generates more than two-thirds of its North American revenue. Takeda generates only 30 percent of its sales from the region.

Multiple Bids

The Japanese drugmaker increased its bid for Shire several times over the past month. The companies said they had reached a preliminary deal worth £ 46 billion or $ 64 billion at the end of April, based on a stronger exchange rate for the pound at that time.

Takeda found himself forced by the UK regulators on Tuesday to start a company bid for Shire to go away or extend the deadline.

The agreement offers $ 30.33 in cash and either .839 new Takeda shares or .788 Takeda American Depositary Receipts. He posted a 60 percent premium on Shire's closing price on March 27 before Takeda announced his interest.

While the business would increase Takeda's earnings potential, it also carries risks. Japanese investors have been worried about the high level of debt, and Moody's Investors Service warned last month that Takeda could face a multi-level credit downgrade due to "high levels of debt".

Takeda said the deal will save around $ 600 million in double R & D costs. The company expects savings of $ 1.4 billion by the third year.

"The cost synergies seem to be much larger than expected over the next three years," said Credit Suisse analyst Fumiyoshi Sakai [Takeda'smarketvalueslipssinceannouncingitsinterestat$34billiontakingonamuchlargerrivalShire'ssharesrose31percentbringingthecompanyamarketcapitalizationofapproximately$50billion

A closed deal would complicate Sprint's $ 40 billion acquisition in 2013, considered the largest acquisition by a Japanese company. Takeda's largest previous purchase was a $ 13.7 billion acquisition of Nycomed A / S in 2011. In the past year, the company expanded its presence in the US oncology market by acquiring Ariad Pharmaceuticals Inc. in the amount of $ 4.7 billion

Pharmaceutical transactions, which were agreed in March by GlaxoSmithKline Plc's involvement to acquire Novartis AG in its Consumer and Health Joint Venture. Merck KGaA has agreed to sell its stationary unit to Procter & Gamble Co., while Sanofi plans to sell its European generics business to buyout firm Advent International Corp.

Takeda said it will retain its headquarters in Japan and will evaluate the consolidation of Shire's operations in Takedas in the Boston area, Switzerland and Singapore.

– Supported by Lee J Miller

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