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Takeda Wins Shareholder Nod for Proposed Acquisition of Shire
Thursday 06 December 2018

6 December 2018 - Shareholders of Japanese drugmaker Takeda Pharmaceutical Company Ltd. (TSX: 4502) have approved proposals related to the company's pending acquisition of Irish drugmaker Shire plc (LON: SHP) at an extraordinary general meeting held this week, the company said.

Takeda's proposal to delegate to the Takeda board the decision regarding the offering terms for the issuance of the new Takeda shares required to implement the proposed acquisition was approved as originally proposed by at least 88% of the votes exercised in respect of this proposal.

The Takeda shareholder approval condition required for the acquisition to be implemented has therefore been satisfied.

It is expected that completion of the acquisition will take place on 8 January 2019.

In addition, Takeda's proposal to appoint three of Shire's existing external directors (namely Ian Clark, Olivier Bohuon and Steven Gillis) to the Takeda Board with effect from closing was also approved as originally proposed (such directors will be external directors and "directors who are not audit and supervisory committee members").

Each of these appointments was approved by at least 87% of the votes exercised in respect of this proposal.

Takeda is in the process of calculating the detailed shareholder vote results from the EGM and expects to release the final voting results without delay.

Under the terms of the acquisition, each Shire shareholder will be entitled to receive USD 30.33 in cash for each Shire share and either 0.839 new Takeda shares or 1.678 Takeda ADSs.

The transaction has been approved by both companies' boards of directors, and is expected to close in the first half of calendar year 2019.

Upon the closing of the transaction, Takeda shareholders will own approximately 50% of the combined group.

The companies say the deal brings together complementary positions in GI and neuroscience; provides leading positions in rare diseases and plasma-derived therapies to complement strength in oncology and focused efforts in vaccines

Takeda said the acquisition of Shire will accelerate Takeda's transformation by bringing together Takeda and Shire's complementary positions in GI and neuroscience.

It will also provide the combined group with leading positions in rare diseases and plasma-derived therapies to complement strength in oncology and focused efforts in vaccines.

Takeda will continue to focus on the acceleration of its oncology business, following its recent acquisition of Ariad Pharmaceuticals. In addition, Takeda's vaccine business will continue to address the world's most pressing public health needs.

Shire's portfolio will benefit from Takeda's strong international presence in emerging markets and Japan.

The integrated company will continue to be headquartered in Japan, expand its R and D presence in the Boston area and have major regional locations in Japan, Singapore, Switzerland and the US.

Takeda and Shire say they have highly complementary pipelines. Shire has strong expertise in rare diseases, an attractive modality-diverse mid- and late-stage pipeline, enriched with large-molecule programs, as well as cutting-edge technologies in gene therapy and recombinant proteins.

Combining this with Takeda's early development and research-oriented R and D program will result in a highly complementary, robust, modality-diverse pipeline and a strengthened R and D engine focused on breakthrough innovation.
The combined group will build on existing partnerships, including Takeda's more than 180 active partnerships with academia, biotechnology companies and startups, to further enrich the pipeline.

Takeda intends to maintain its investment grade credit rating, with a target net debt to EBITDA ratio of 2.0x or less in the medium term.

Takeda is confident that the acquisition will create an opportunity to recognize significant recurring cost synergies, with potential for additional revenue synergies from the combination of Shire and Takeda's combined infrastructure, market presence and development capabilities.

Takeda expects recurring pre-tax cost synergies for the combined group to reach a run-rate of at least USD 1.4bn per annum by the end of the third fiscal year following completion of the acquisition.

Under the terms of the acquisition, Shire shareholders will be entitled to receive, for each Shire share, USD30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda ADSs.

The acquisition terms imply an equivalent value of GBP 48.17 per Shire share based on the closing price of JPY 4,535 per Takeda share on May 2, 2018.

This transaction has been approved by the boards of both companies, and is subject to the approval of Shire and Takeda shareholders and certain customary closing conditions, including regulatory approvals.
The acquisition is expected to close in the first half of calendar year 2019.

Upon completion, the new Takeda shares will be listed on the Tokyo Stock Exchange, and local Japanese stock exchanges. In addition, Takeda will apply for its ADSs (each representing 0.5 Takeda shares) to be listed on the NYSE effective on or shortly after the effective date.

Takeda has entered into a bridge facility agreement of USD 30.85bn with, among others, J.P. Morgan Chase Bank N.A., Sumitomo Mitsui Banking Corp. and MUFG Bank, Ltd., part of the proceeds of which will be used to fund the cash consideration payable to Shire shareholders in connection with the acquisition.

It is currently contemplated that, prior to completion, the commitments under the bridge facility agreement will be reduced or refinanced with a combination of long-term debt, hybrid capital and available cash resources.
Details
Date Published: 06/12/2018
Target: Shire plc
Country: UK
Deal Size: 62bn (USD)
Sector: Pharmaceuticals
Type: Corporate acquisition
Financing: Cash and Stock
Status: Agreed
Vendor:
Buyer: Takeda Pharmaceutical Company
Comment:
Upon the closing of the transaction, Takeda shareholders will own approximately 50% of the combined group.

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