London-listed Shire, the maker of treatments for ADHD and rare diseases, has agreed a £46bn bid from Japan’s Takeda, in the biggest deal seen in the pharmaceutical sector since 2000.
The deal is the latest in a series of takeovers involving British companies. It came as Virgin Money, backed by Sir Richard Branson, said it was reviewing an all-share takeover approach worth £1.6bn from CYBG, the owner of Clydesdale and Yorkshire Bank. A deal would bring together two of Britain’s biggest challenger banks.
After suffering several rebuffs, Takeda secured a recommendation from the Shire board by raising the amount of cash in its offer to $30.33 (£22.43). Shire shareholders will also receive 0.839 new Takeda shares for each share. The offer is worth £49.01 a share, about £5 more than Takeda’s initial bid in late March.
Takeover fever: Shire agrees £46bn bid, as Virgin Money gets £1.6bn offer – business live
Shares in the FTSE 100 listed company rose by 5% n early trading but remain well below the offer price, indicating that Shire shareholders still have reservations about the deal. There are concerns that the move will overstretch Takeda’s finances.
The Shire chief executive, Flemming Ornskov, insisted the deal was “in the best interests of shareholders and offers an opportunity to improve the lives of even more patients globally with rare and highly specialised conditions”.
If it is approved by shareholders of both companies, Shire investors will own about half of the combined group, which will be listed on the Tokyo stock exchange. Up to three Shire directors will join the Takeda board.
The deal will give the Japanese company Shire’s lucrative rare diseases portfolio and is also expected to generate cost savings of at least £1bn.
Susan Kilsby, the chairwoman of Shire, said: “Over the last 30 years, Shire has become the global leader in treating rare diseases … With this combination, Shire helps create an even stronger biopharmaceutical company, with a robust R&D pipeline and expanded global footprint.”
Shire, founded in Basingstoke, Hampshire, in 1986, makes ADHD drugs Adderall and Vyvanse and the dry-eye drops Xiidra, as well as treatments for rare diseases. The company is based in Dublin for tax purposes but run from Boston and has shifted most of its operations from the UK to the US.
In 2014, Shire came close to being taken over by US drugmaker AbbVie but the deal was scuppered by a US clampdown on tax inversions, through which American companies bought overseas businesses to secure a lower tax rate. Shire went on to acquire US firm Baxalta for £24.7bn in 2016. In April, it sold its oncology business to France’s Servier for £1.7bn.