Management / Drugs maker Shire agrees £22 billion takeover for US rival

Drugs maker Shire agrees £22 billion takeover for US rival

Dublin-based drug maker Shire said it has agreed a 32 billion US dollar (£22 billion) deal to buy American rival Baxalta International, in a move that maintains intense takeover interest in the sector.


London-listed Shire said the deal will make it one of the leading firms producing treatments for rare diseases such as unusual blood conditions, cancers and immune system disorders.

It also added that the deal, if completed, will be its biggest acquisition since the firm was founded in 1986.

The move comes after global mergers and acquisitions in the pharmaceutical industry totalled 550 billion US dollars (£378 billion) in 2015, driven by the need for firms to find lucrative blockbuster treatments.

The purchase by Shire also highlights the appeal of medicines for rare diseases targeting small groups of patients for which drug companies can charge prices running into hundreds of thousands of pounds a year.

Shire chief executive Flemming Ornskov said a tie-up with Baxalta would create the leading specialist producer of therapies for rare diseases with projected annual revenues of 20 billion US dollars (£13.7 billion) by 2020.

Mr Ornskov said: “Together, we will have leadership positions in multiple, high-value franchises and become the clear partner of choice in rare diseases.

He added the enlarged firm will have a presence in more than 100 countries.

Baxalta also brings a strong position in haemophilia treatments to the combination.

Baxalta chief executive Ludwig Hantson said: “We bring to Shire a strong portfolio and pipeline of market-leading products, high-quality manufacturing capabilities and a talented global workforce that places patients at the centre of everything we do.”

Stockholders will receive 18 US dollars (£12.37) in cash and 0.1482 Shire American depositary shares for every Baxalta share.

US rival AbbVie attempted to buy Shire for £32 billion in 2014, partly because of potential tax savings, but the bid was derailed by political opposition in Washington.