Business / Corporate

Takeda completes buyout of Shire to become top 10 global pharmaceutical firm

Kyodo

Takeda Pharmaceutical Co. said Tuesday it has completed the acquisition of Irish drugmaker Shire PLC and made it a wholly owned subsidiary, becoming a global top 10 pharmaceutical company in terms of sales.

The ¥6.2 trillion ($57 billion) takeover of Shire made it the biggest-ever Japanese acquisition of a foreign firm. The deal is expected to nearly double Takeda’s annual consolidated sales to $31.3 billion.

The Japanese drugmaker, known for its expertise in oncology, gastroenterology and neuroscience, aims to boost sales in medicines for rare diseases such as hemophilia — in which Shire has strength — and expand its business in the key U.S. market through the deal.

After acquiring Shire, Takeda plans to expand research and development spending to more than ¥400 billion annually, although the expenditure would still be smaller than that of major overseas rivals.

Takeda CEO Christophe Weber said in a statement that the move “marks a significant moment in Takeda’s history and is an exciting step forward as we accelerate our transformation journey to deliver highly-innovative medicines to patients around the world with expanded scale and geographical footprint.”

The company operates in approximately 80 countries and regions. It will examine Shire’s financial situation and plans to release its earnings outlook for fiscal 2019, which starts in April, and a long-term strategy in May.

Following the purchase, Takeda will book around 49 percent of its sales in the United States, the world’s largest pharmaceutical market, while the ratio in Japan and emerging markets will stand at 18 percent and 14 percent, respectively.

Although the integration will help cut costs by at least $1.4 billion a year by fiscal 2021, it will also increase Takeda’s net interest-bearing debt to more than ¥5 trillion, about 10 times the amount before the acquisition.

To finance the debt, Takeda has been accelerating selling of its noncore businesses.

Shares of Takeda have yet to recover to the level before March last year, when the company announced it was considering buying Shire.

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5