On April 20, Takeda raised the bid. Merck has agreed to sell its over-the-counter unit to Procter & Gamble, while Sanofi plans to sell its European generic-drug business to buyout firm Advent International. The sale was unrelated to the Takeda acquisition bid and had been ongoing since the beginning of the year.
"That's part of the planning we need to do now", said Ramona Sequeira, president of Takeda's USA business unit. Under the terms of the deal, Takeda will buy Shire for about 46 billion pounds, or $62.2 billion (U.S.).
Enhancing Takeda's cash flow profile.
The deal has been approved by the boards of both companies and is expected to close following shareholder and regulatory approval in the first half of next year.
It's also the largest takeover ever carried out by a Japanese company, according to data provider Dealogic.
"We firmly believe that this combination recognizes the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve", Shire Chairman Susan Kilsby said in the statement.
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For the deal between Takeda and Shire to proceed, 75% of Shire's voting shareholders must support the transaction. The two companies have been holding negotiations since then.
Drill down into the fine print of the deal, and you'll find that the top execs at Takeda will ax 6% to 7% of the combined workforce.
Takeda said it would maintain its headquarters in Japan and would evaluate consolidating Shire's operations into Takeda's in the Boston area, Switzerland and Singapore.
The share price in both companies rose on the news - Shire's by 3.6 percent to 39.96 pounds, and Takeda's by the same rate to 4,638 yen. Shire's shares have soared 31%, giving the company a market capitalisation of about $50bn. Shire, on the other hand, earns about two-thirds of its product revenue from the US - a fact Takeda highlighted in its rationale for pursuing the biotech. Shire's will gain more exposure in Japan and emerging markets. The company could also consider issuing shares, he added. That's a 60 percent premium to the price before Takeda first said it wanted to take over Shire, on March 28.
The Japanese company also indicated that acquisition would allow for "significant recurring cost synergies".
The companies eventually expect to realize about $1.4 billion in annual cost savings from combining, the majority of which will come from reducing duplicative functions in sales and marketing, Takeda said.