Japan's biggest ever deal: Takeda buys Shire for $62 billion

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In particular, Shire would give Takeda access to research and development in fields the Japanese firm has long sought, including digestive systems, mental illness and rare diseases.

Christophe Weber, Takeda CEO, commented on the acquisition of Shire's "highly complimentary product portfolio and pipeline", saying that it will accelerate Takeda into a strong company, targeting gastroenterology, neuroscience, oncology, rare disease, and plasma-derived therapies. Takeda added that Shire's drug portfolio would benefit from greater exposure in Japan and emerging markets.

Currently, about a third of Takeda's sales come from the Japanese market, with a similar share represented by USA sales.

Takeda had raised its bids over a six-week chase and agreed on a 60% premium to Shire's closing price on March 27, before Takeda disclosed its interest.

The drug maker will be paying almost 49 pounds in cash and stock for each share of the Ireland based company, Shire, as per the closing shire price of Takeda on 23 April (the day before the preliminary deal was announced). The companies indicated in late April they had reached a preliminary deal valued at £46 billion, or US$64 billion, based on a stronger exchange rate for the pound at the time.

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The $62.2 billion figure does not include Shire's debt. Takeda shareholders will have to agree, though, and the deal hasn't been popular with investors so far. Japanese investors have anxious about the hefty debt. Once complete, the merged firm will leapfrog AstraZeneca and Eli Lilly to become one of the largest pharmaceutical companies by sales. Japanese investors have anxious about the hefty debt, with Moody's Investors Service warning last month that Takeda could face a multiple-step credit downgrade due to a "spike in leverage". Takeda also announced that the deal will cut R&D costs by about $600 million, with overall savings of $1.4 billion by the third year. Its net profit is about three times more than Takeda's. Takeda's existing shareholders are facing a hard time as their stake will be reduced to half.

Takeda will pay $66.56 per Shire share: $30.33 in cash, with the rest in the form of 0.839 of a new Takeda share.

The acquisition will create a combined company to be half owned by Shire shareholders upon completion of the deal, which is subject to approval by shareholders of both companies and expected to close in the first half of 2019. Takeda's largest previous purchase was a US$13.7 billion takeover of Nycomed in 2011.

In a separate statement today, Takeda said it will continue to focus on growing its oncology portfolio, which along with its hematology holdings expanded past year when Takeda acquired Ariad Pharmaceuticals for $5.2 billion. It will also have "major" regional locations in Japan, Singapore, Switzerland, and the U.S.

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