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Japan's Takeda confirms interest in Shire deal

Buying the Irish drugmaker would mark the Japanese group's biggest acquisition by far

Takeda's most recent big purchase was last year's roughly $5.2 billion deal for U.S.-based Ariad Pharmaceuticals.

LONDON -- Takeda Pharmaceutical, Japan's biggest drugmaker by sales, confirmed it is weighing a bid for Irish peer Shire as industry players around the world vie to gain promising new drug canidates through acquisitions.

A spokesperson for the Osaka-based company said it had issued a statement in the U.S. in response to media reports that it was looking to buy Shire. The spokesperson described the possible bid as "one of several" options under consideration by Takeda. 

Shire, which takes in about $15 billion in annual revenue and has strength in treatments for rare diseases, said in a statement Wednesday that it had yet to be approached by Takeda.

The Japanese drugmaker's statement Tuesday said "no approach has been made to the Board of Shire," adding that consideration of an offer "is at a preliminary and exploratory stage."

Buying Shire would strengthen "core therapeutic areas of oncology, gastrointestinal, and neuroscience," Takeda explained. The move would also help it enhance operations in the U.S., Shire's main market. The Irish drugmaker's products include treatments for hemophilia, ADHD and lysosomal storage diseases -- inherited disorders leading to abnormal body function from enzyme deficiencies.

Takeda, which is led by French-born CEO Christophe Weber, has completed three acquisitions over 500 billion yen ($4.68 billion), the most recent being its purchase of U.S. drugmaker Ariad Pharmaceuticals for about $5.2 billion last year.

A bid for Shire would far exceed those past deals. London-listed Shire's market capitalization was about 28 billion pounds ($39.4 billion) as of Tuesday's close. Its share price jumped as much as 26% on Wednesday after Takeda's announcement.

There is no certainty of any transaction, but should Takeda buy all of Shire, the deal would surpass SoftBank Group's 2016 purchase of U.K. chipmaker Arm Holdings for about $32 billion as the largest foreign acquisition by a Japanese company.

A deal of that size could put pressure on Takeda's finances. The company's equity ratio sank to about 40% in the year ended March 2017 from nearly 80% nine years earlier, and its interest-bearing debt totals roughly 1 trillion yen.

Takeda must either announce a firm intention to make an offer for Shire or say it has no plans for an offer no later than 5 p.m. London time on April 25 in accordance with the U.K.'s takeover code, Shire said in its statement.

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