Takeda-Shire blockbuster deal: is it worth it?

March 29, 2018

Takeda announced it was considering a bid for Western rival Shire, which could potentially create a global top-10 drugmaker with a market value of more than $80 billion. But investors and analysts question whether the hit Takeda’s finances would take would ultimately be worth the boost to its portfolio and pipeline.

The Japanese drugmaker is smaller than Shire. Shire saw its shares jump 16 percent to a value of $45 billion after the Japanese firm said it was in a “preliminary and exploratory stage” of considering a bid. But Takeda investors are skeptic, and shares in the Japanese drugmaker tumbled 7.4 percent.

According to Takeda, a transaction with Shire would strengthen Takeda’s core therapeutic areas of oncology, GI and neuroscience; accelerate Takeda’s vision to be a leader in specialized medicines; increase market opportunity in the United States; enhance R&D and strengthen Takeda's large-molecule focused, late-stage pipeline.

Still, analysts are doubting  whether Shire’s treatments for haemophilia and other rare diseases would benefit Takeda and believe a more targeted deal would be better.

Taxes are also a consideration. As pointed out by a report in the Financial Times, since Shire is based in Ireland and enjoys a low corporate tax rate, an acquisition could mean a rise in tax rates.

Takeda said it will decide by April 25 whether to go through with the bid.