The US Federal Trade Commission (FTC) has given its nod for the proposed $62 billion acquisition of Shire (SHPG) by Japanese firm Takeda Pharmaceuticals. The merger, the largest ever by a Japanese company, was cleared sans any conditions. Takeda plans to close the acquisition during the first half of next year.
The deal was sealed in May this year. By winning the US regulatory approval, the Tokyo-listed company has overcome just one roadblock. It now needs to convince regulatory authorities of the European Union and China that the deal is not harmful to competition, besides obtaining shareholders approval.
In fact, getting approval from Takeda shareholders can prove to be a bit tricky. A group of Takeda shareholders including the founding family members of the company have joined forces to stop the deal and CEO Christophe Weber, who has been under immense pressure, is working towards persuading them to go ahead with the deal. According to Takeda, acquiring a peer that specializes in rare diseases would be transformational for the company.
Takeda, which has been struggling with a shrinking domestic market, is pushing for this deal to boost its global expansion. The company would pay $66.56 for a Shire share in the cash-and-share deal.
This is a big gamble for Weber as the company will have to take on massive sums of debt to fund the deal. And the concern over debt has weighed heavily on Takeda’s share price. To fill the financial gap, Takeda has been dumping assets outside its core focus area.
FiercePharma reported that Takeda is considering the sale of its former headquarters and surrounding buildings by the end 2018. If the deal is successful, the total debt load, including Shire’s existing debt, will increase to approx. $54 billion. The sale of its former headquarters is said to boost finances for the Shire deal.
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