Takeda shareholders approve £46bn takeover of Shire

Move paves the way for creation of a global drugmaker with combined revenues of $32bn

Shareholders of Takeda Pharmaceutical arriving for a  shareholders’ meeting in Osaka, Japan, on December 5th. Photograph: Kyodo/via Reuters

Shareholders of Takeda Pharmaceutical arriving for a shareholders’ meeting in Osaka, Japan, on December 5th. Photograph: Kyodo/via Reuters

 

Takeda Pharmaceutical has won key shareholder approval to finance its £46 billion (€51.6bn) takeover of Shire, paving the way for Japan’s largest corporate takeover and the creation of a global drugmaker with combined revenues of $32 billion (€28bn).

The vote on Wednesday caps months of aggressive campaigning by Christophe Weber, Takeda’s chief executive, to fend off attempts by some founding family members to derail a deal that the 237-year-old group sees as pivotal to securing its place among the world’s top 10 pharmaceutical companies.

Following a 2½ hour extraordinary general meeting held in Osaka, Takeda said it won approval from at least 88 per cent of its shareholders to issue new shares to acquire the Irish drugmaker.

“With shareholder approval secured, we are looking forward to closing the acquisition in the coming weeks to create a more competitive, agile, highly profitable, and therefore more resilient company,” Mr Weber said in a statement.

The acquisition would add Shire’s lucrative rare diseases portfolio to Takeda’s pipeline, which lacked big late-development experimental drugs. It will also expand its presence in the US, the world’s largest pharmaceutical market, which would account for roughly half of its combined revenues after the deal closes in January.

Of the £46 billion, the company is expected to fund about £25 billion in new Takeda shares, and it has also secured $31 billion in bank loans.

Since Takeda revealed its interest in Shire in late March, shares have fallen more than 20 per cent on concerns about the sheer size of the deal and the dilution for existing shareholders. On Wednesday, the stock briefly fell 2.2 per cent after the vote before recouping the losses.

Net debt

A group of more than 100 former Takeda employees and founding family members have campaigned against the deal, expressing particular concern about the $48 billion in net debt the group will shoulder after the acquisition.

Takeda has said it plans to reduce debt by divesting up to $10 billion in non-core assets, and also through cost cuts of at least $1.4 billion and cash flow of the merged entity.

Investors have also pointed to the mounting competitive threat to Shire’s lucrative haemophilia franchise, which accounts for roughly 25 per cent of its revenues.

The dissidents recently won the support of Kunio Takeda, the drugmaker’s former chairman and the last member of the Takeda family to run the company. However, the campaign failed to gather enough support from retail investors and Japanese institutional investors.

The vote was in line with analyst expectations for a 90 per cent support rate after Glass Lewis and Institutional Shareholder Services both advised Takeda investors to approve the takeover.

The company has also won regulatory clearance from all of its major markets. – Copyright The Financial Times Limited 2018