Dublin-based Shire in advanced talks to acquire Baxalta for $32bn

Shire, the pharmaceutical company based in Dublin, is in advanced talks to acquire Baxalta for about $32 billion (€29.5 billion) in cash and stock, excluding debt, sources have said.

The two drugmakers may announce a deal this week.

The price being discussed is $46.50 to $48 a share. Final details of the transaction are still being negotiated and the timing and structure of any offer may change, the sources said. Representatives for Baxalta did not immediately respond to requests for comment outside of regular business hours. A spokeswoman for Shire declined to comment.

In July, Baxalta rebuffed an unsolicited $30 billion all-stock bid from Shire that valued the company at $45.23 a share.

The company, which is based in Deerfield, Illinois, was seeking a higher offer that included cash, sources said last month.

New drugs

If a deal succeeds, the company would generate $20 billion in sales by 2020, with as many as 30 new drugs to launch over five years for diseases ranging from dry eye disease to haemophilia, Shire has said.

Shire has been focusing on acquiring companies with treatments for rare conditions, including its November purchase of Dyax for $5.9 billion and the $5 billion acquisition of NPS Pharmaceuticals in February.

The drugmaker has been bulking up following AbbVie’s abandoned $52 billion buyout of the company last year. Shire structured the original bid as an all-stock transaction to help preserve tax benefits of Baxalta’s July spinoff from Baxter International Inc.

Baxalta could benefit from a lower tax rate if taken over by Shire, which has a Dublin legal address despite having many operations elsewhere.

The combination would yield an effective tax rate of 16-17 per cent, Shire said. Baxalta had projected a tax rate of 23 per cent in 2016. – (Bloomberg)