Brushing aside shareholder opposition, Sankyo Co. President Takashi Shoda on Friday defended his firm's decision to acquire Daiichi Pharmaceutical Co.
The two firms have agreed that Sankyo will pay a premium for the merger, giving Daiichi 1.159 shares of Daiichi Sankyo Co., the joint holding company to be created upon integration, in exchange for each Daiichi share.
"We do not think we are paying that excessive a premium," said Shoda, saying the union would cut mutual costs by 50 billion yen and increase sales by 17 billion yen in fiscal 2007, outweighing the integration costs of 16 billion yen.
Shareholder activist fund and Sankyo investor M&A Consulting Inc. issued a statement Thursday opposing the merger, saying the deal would damage the interests of Sankyo and its shareholders.
"Daiichi is not a suitable partner for Sankyo if it is to increase development efficiency and improve research efforts," the statement said, adding that the two companies have different product lines. A merger between Sankyo -- the nation's second-largest drug maker in sales -- and a larger Japanese drug firm would be more beneficial and improve Sankyo's competitiveness, it said.
M&A Consulting, led by former government bureaucrat Yoshiaki Murakami, has increasingly taken the spotlight as a defender of shareholder rights in Japan.