Takeda Pharmaceutical Acquires Shire Plc for US$ 62 Billion
Takeda Pharmaceutical Company Ltd. in its largest deal ever, announced the acquisition of Shire Plc. at around US$ 62 (£46 billion) on May 8, 2018. Shire’s complementary product portfolio and pipeline in gastroenterology and neuroscience, two of the core business segments of Takeda, may have been the primary focus for this acquisition, as highlighted in Takeda CEO’s, Christophe Weber, statement post the announcement of the acquisition. This acquisition will not only make the combined entity (Takeda + Shire) one of the leading players in gastroenterology and neuroscience markets, but also one of the top 10 pharmaceutical companies on the basis of revenue in 2017. Moreover, Shire has multiple products in pipeline for rare diseases, which will help Takeda to establish itself as a strong contender in this (i.e. rare disease drugs) growing market. The acquisition will also make the combined entity resilient and prepared for a tough environment, especially in the U.S., as stated by Takeda CEO in one of the recent interview. The combined entity is expected to gain about 50% of its revenue from the U.S. The U.S. is witnessing conflicts regarding prices of pharmaceutical drugs and innovative tactics of delaying entry of generics in the market.
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The company is expecting the acquisitions to go according to its plans, however, the value of the deal, which is about 4 times the revenue of Takeda and 2x its market value has made the investor worrisome about the future of Takeda. This is reflected in continuous decline of the Takeda share price since March, when rumors about this acquisition came out in public. However, for now the company (i.e. Takeda) has managed to get receive fund by entering into ‘364-Day Bridge Credit Agreement” with the initial lenders including JP Morgan Chase Bank, N.A., Sumitomo Mitsui Banking Corporation, and MUFG Bank, Ltd. for US$ 30.85 Bn, which is expected to significantly aid the company in the acquisition.
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