Takeda Pharmaceuticals, the pharmaceutical industry's "snake swallowing elephant," will buy Shire for $58 billion

On December 5, local time, Takeda, the Japanese pharmaceutical group, announced the results of a shareholder meeting in which Takeda's shareholders approved the acquisition of Shire, the British maker of rare diseases. The acquisition is expected to be completed on January 8, 2019.
88 per cent of Takeda's shareholders voted in favour of the deal at Takeda's shareholders' meeting on December 5th, despite opposition from some shareholders. In the end, Takeda Pharma bought Shire for $58 billion, the largest deal in the pharmaceutical industry this year.
's proposal to continue appointing three of Shire's external directors (not involved in auditing and oversight) was approved by 87 per cent of the vote.
deal was initially agreed in May 2018, with Takeda's formal offer of about $62.2 billion. The deal, which follows five public bids for Shire, was called for $30.33 in cash and 0.839 shares of Takeda shares. Currency fluctuations and a fall in Takeda's share price have reduced its market capitalisation to about $58 billion.
not only acquired Shire's patented technology, but also gained a larger U.S. market share in rare disease drugs. In addition, Takeda has taken on a lot of debt for Shire, which brings the total to nearly $80 billion. As part of the final deal, Takeda received $30.9 billion in bank loans.
Given that Shire's market capitalisation is almost twice that of Takeda, some shareholders in Takeda Pharmaceuticals, also known as TTBF, have repeatedly tried to block the deal in the face of the reality of the disparity.
's annual general meeting in June, the group expressed opposition and suggested that large acquisitions would require prior shareholder approval. At the time, the group had about 130 shareholders, but the proposal received only about 10 per cent of the vote in favour and ultimately failed to gain more opposition support.
, the opposition won a heavyweight supporter, Kazu Takeda, a member of the Takeda family. He told the New York Times: "The group should avoid making hasty decisions about big deals. Large-scale mergers and acquisitions without careful consideration can be disastrous for the group. He
that the deal would undermine the basic principle of Takeda-ism: companies make money by companies that give people a healthier, brighter future. He told the New York Times: "We know that scale-up is necessary, but Takeda's management must consider the corporate culture and the state of the company." Despite
opposition, almost 90 per cent of shareholders voted in favour of the deal. Takeda's shares have fallen 25 per cent since the acquisition was first disclosed in March. "I want to continue to hold shares in Takeda, but now I'm worried that the share price will fall further," Satoshi Ito, a 75-year-old shareholder, told CNBC. He abstained from voting on the deal.
said before the vote: "We are absolutely opposed to this deal because the financial risks are too great and the expected returns are quite limited." I think the merger is necessary for Takeda Pharmaceuticals, but Shire is not the best choice. Christopher Weber
chief executive of Takeda Pharmaceuticals, said the deal would be profitable because he planned to cut costs. He expects to save at least $1.4bn a year over the next three years after the deal ends. At the same time, Takeda plans to sell up to $10 billion in non-core assets to help the group repay its loans.
, head of global research and development at Takeda Pharmaceuticals, said: "We have a divestiture plan that will allow us to reach the levels set by credit institutions within three to five years. Our credit rating may be down one notch, but it's still higher than junk bond ratings, which is critical to us. Kazu Takeda
is not the only one who realises that Takeda needs acquisitions to remain competitive. In addition to the debt, Takeda faces a deeper question about whether a takeover of Shire is the best option. Shire has a large share of the haemophilia market, but it also faces competition from Roche.
"s ability to invest the profits from the deal in the development of new drugs is crucial. The deal's advantages can only last for a while, after all, no treatment can prevent patents from expiring. Kazuaki Hashiguchi, senior drug analyst at Daiwa Securities, said. (Arterial network)