Japan’s largest Pharmaceutical Company Takeda, has reached an initial agreement to acquire Shire Plc. for 46 billion pounds. If this takeover is confirmed, then Takeda Pharmaceutical Co will become one of the biggest Pharmaceutical companies in the world.
Shire Plc’s board of directors said that it is eager to propose this deal to the shareholders. The U.K. based company’s board also announced that it has ample time for the regulators to conclude this deal.
In Tokyo trading, Takeda has declined by approximately 9.3 percent in 5 years. If the Japanese based company can acquire the Shire, then it will be the company’s largest-ever single transaction.
Takeda’s CEO, Mr. Christophe Weber is aiming to revamp the company. Under his leadership, Takeda has also eyed for global growth amid a declining local population and patent expirations.
Meanwhile, in London trading, shares of Shrine increased by less than a mere 1 percent. The company is now expected to be worth 36 billion pounds.
As a result of the proposed Takeda deal, the drug maker’s shareholder will own nearly half of the new company. While speaking about this deal, Sanford C. Bernstein & Co’s analyst, Ronny Gal said that Takeda and Shire deal is more than a simple merger.
Japanese investors are worried that Shire shareholders could sell their new stock. Wednesday, Moody’s investors’ service wrote that the deal could downgrade Takeda’s A1 rating.
On the other hand, Mitsushige Akino, an analyst at one of Japan’s asset management firm said that the market is not in favor of this deal and is looking negatively towards it. Adding further, he said that he fears the transaction is too big for Takeda and the company might not be able to manage.
Both the companies confirmed that Takeda is proposing 49 pounds per share and 27.76 pounds in stock. The companies are also offering 21.75 pounds in cash. Some industry experts believe that this deal will not materialize as there are too many complications involved.