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Business deals

Takeda to issue 770 million shares for Shire acquisition

Deal will help make drugmaker a global biopharmaceutical player, CEO says

Christophe Weber, CEO of Takeda Pharmaceutical, describes his company's path to becoming a global biopharmaceutical maker, at a news conference in Tokyo on Jan. 7. (Photo by Akihide Anzai)

TOKYO -- Takeda Pharmaceutical announced on Monday it will issue approximately 770.3 million new shares as compensation for the acquisition of its Irish peer Shire. Takeda's shares will double from their current number, enabling the Japanese company to obtain all Shire shares held by shareholders, combined with newly issued stock and cash.

Takeda called a press conference in Tokyo one day ahead of the planned completion of its purchase of Irish drug maker Shire, which will create the world's eighth largest pharmaceutical giant. In an upbeat speech, President and CEO Christophe Weber said Takeda aims to become "a leading company in biopharmaceuticals."

The takeover will boost Takeda's consolidated revenue to $31.3 billion. It will increase the share of the U.S. market in Takeda's revenue to 49% from around 30% currently, while the figure for Japan will decline to 18% from 30%.

Takeda, which has operations in 80 locations around the world, aims to become a global company driven by research and development, Weber said. He pointed out that the company stands to expand margins through the acquisition of Shire's highly profitable products.

Weber played down the financial risk arising from the $29.7 billion in interest-bearing debt raised to achieve the acquisition, which sparked investor jitters. He said Takeda will be able to pay the debt down quickly, which along with planned asset divestment will ensure the company will maintain an investment-grade credit rating.

The acquisition is to be completed on Tuesday, with the total acquisition fee expected to hit 6 trillion yen ($55 billion).

Takeda shares on the Tokyo Stock Exchange were up 10% at one point on Monday compared to the weekend, relieving investor uncertainty over the size of the issuance, as well as satisfying the market with a smaller-than-expected acquisition cost amid the recent appreciation of the yen. The company's shares finished trading Monday at 3,995 yen, up 7.5%.

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