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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Takeda Pharmaceutical Company Limited    4502   JP3463000004


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Takeda clears key hurdle as investors back $59 billion Shire deal

12/05/2018 | 10:37am EST
FILE PHOTO: The logo of Takeda Pharmaceutical Co. is displayed at the company's news conference venue in Tokyo

OSAKA (Reuters) - Takeda Pharmaceutical has won shareholder approval for its $59 billion takeover of London-listed Shire, creating a global powerhouse that has a stronger drugs pipeline but is also saddled with massive debt.

Takeda will be joining the ranks of the world's top 10 drugmakers and gaining expertise in rare diseases through the deal, the biggest overseas acquisition by a Japanese company.

It will also become one of the most indebted. In addition to issuing new shares, the company has secured $30.9 billion in bank loans.

The company's high debt levels were a top concern for Takeda shareholders who gathered at an extraordinary meeting in Osaka, western Japan, although almost 90 percent of them voted to approve the deal as expected.

"I want to keep my Takeda shares into the future, but now I am worried about further declines in the share price," said Satoshi Ito, a 75-year-old shareholder. He abstained from voting.

Separate meetings of Shire shareholders later on Wednesday also secured overwhelming support for the transaction.

Takeda shares have fallen around 25 percent since the drugmaker revealed its interest in the acquisition in March. They closed up 1 percent at 4,240 yen on Wednesday.

Shire shares gained 3.2 percent to 46.95 pounds on relief Takeda's board had won its nine-month battle to persuade shareholders of the merits of the tie-up.

The acquisition is expected to close on Jan. 8. It now only requires sanctioning at a court hearing expected to be held on Jan. 3.


A small group of Takeda investors, including descendants of the company's founder, had actively opposed the deal.

"We are definitely against this because the financial risks are too great and the expected benefits are quite limited," said Kazuhisa Takeda, a former director of the drugmaker and a member of the founding family, ahead of the meeting.

"I think M&A is quite necessary for Takeda's future but Shire is not the answer."

Chief Executive Christophe Weber has promised to turn the deal profitable by slashing costs. It predicts annual savings of at least $1.4 billion three years after completion, and expects to boost underlying earnings significantly from the first full year after closing.

Takeda also has a plan to sell up to $10 billion worth of non-core assets to pay back debt. Andy Plump, Takeda's global head of R&D, told Reuters that accelerated deleveraging was needed to keep its credit rating at a safe level.

"We have a plan for divestiture that gets us to a place in three to five years that our credit agencies are OK with. Our credit rating is likely to tick down a notch, but still above junk bond status, which is critical for us," he said in an interview.

Analysts have said it may be difficult to integrate the two companies. Toshiba's acquisition of Westinghouse over a decade ago and Japan Post Holdings' $4.9 billion bet on Toll Holdings are widely seen as examples of many Japanese companies having paid high valuations in cross-border deals only to face massive write-downs later.

But they also said Takeda has little choice but to seek growth abroad, with industry pressure to gain access to cutting-edge treatments amid declining revenue from older drugs that must compete with cheaper generics.

Even with the acquisition of Shire, some said Takeda will need to bolster its lineup of experimental therapies to compete in the longer term.

Shire's haemophilia business, for example, is already starting to face strong pressure from a competing drug being marketed by Roche as well as new gene therapies now in development.

"It's crucial whether the drugmaker can reinvest profits from the deal into seeds for developing future drugs," said Kazuaki Hashiguchi, a senior drugs analyst at Daiwa Securities.

"The benefits of the deal will last for a limited time, as no treatments can avoid patent expiration."

(Reporting by Takashi Umekawa, with additional reporting by Julie Steenhuysen in Chicago and Ben Hirschler in London; Editing by Muralikumar Anantharaman/Mark Potter/Susan Fenton)

By Takashi Umekawa

© Reuters 2018
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Sales 2021 3 228 B 31 128 M 31 128 M
Net income 2021 202 B 1 946 M 1 946 M
Net Debt 2021 3 840 B 37 030 M 37 030 M
P/E ratio 2021 35,7x
Yield 2021 4,76%
Capitalization 5 913 B 57 034 M 57 009 M
EV / Sales 2021 3,02x
EV / Sales 2022 2,83x
Nbr of Employees 47 495
Free-Float 99,1%
Duration : Period :
Takeda Pharmaceutical Company Limited Technical Analysis Chart | MarketScreener
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Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus BUY
Number of Analysts 13
Average target price 5 150,00 JPY
Last Close Price 3 782,00 JPY
Spread / Highest target 71,9%
Spread / Average Target 36,2%
Spread / Lowest Target 8,41%
EPS Revisions
Managers and Directors
Christophe Weber President, CEO & Representative Director
Constantine Saroukos Chief Financial Officer & Director
Andrew S. Plump Director, Research & Development President
Michael E. Mendelsohn Chief Medical & Scientific Officer
Yasuhiko Yamanaka Director
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