Takeda shareholders give greenlight for £46 billion Shire deal

The vote lays the foundations for what will become Japan’s biggest corporate takeover deal in a move that will make or break the Japanese drug maker.

Takeda Building
Source: Bloomberg

Takeda Pharmaceutical has secured support from its shareholders to proceed with its £46 billion acquisition of Shire.

The deal will be Japan’s largest ever corporate takeover and will see Takeda become a leading global pharmaceutical company with combined revenues exceeding $30 billion.

‘We are delighted that our shareholders have given their strong support to our acquisition of Shire,’ said Christophe Weber, President and CEO of Takeda.

‘With shareholder approval secured, we are looking forward to closing the acquisition in the coming weeks to create a more competitive, agile, highly profitable, and therefore more resilient company, poised to deliver highly innovative medicines and transformative care to patients around the world.’

Takeda rises to become global drug maker

Now that the deal has gained approval from Takeda’s shareholders, the acquisition is expected to be finalised next year on 8 January.

The deal is a massive step forward for the Japanese drug marker that will take Takeda from a strong regional player in the Asia to one with a global presence, particularly in the US, which represents the largest pharmaceutical market in the world.

‘Takeda is undergoing a fundamental transformation, from a sleepy regional player to a global player,’ CLSA analyst Stephen Barker wrote in a recent report. ‘Scale is vital because development costs are rising and a global footprint is the key to maximising revenue from new products.’

Shire deal poses big risk for Takeda

Despite a lot of synergies from the Shire deal, the Japanese drug maker is putting down a big bet that it hopes will pay off in the end.

The £46 billion price tag for Shire is massive, with Takeda rumoured to be funding the deal via a mix of new shares and debt, with the Japanese drug maker funding around £25 billion via a rights issue and around £24 billion in bank loans.

The sheer amount of capital raised to go ahead with the acquisition is a cause for concern for investors, which has precipitated in the drug maker’s stock price losing around 20% of its value since the deal was announced.

Investors have become increasingly worried about the dilution risk for existing shareholders and the realisation of how much is at stake if the deal isn’t a success.

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