Takeda and Shire boards agree on £46 billion takeover

The deal, which is subject to the approval of shareholders of both businesses, would see the merged company become the global leader in combating rare diseases, the companies said in an investor announcement.

"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies," Christophe Weber, chief executive of Takeda, said. "We are looking forward to the benefits this combination will bring to patients worldwide, the opportunities it will bring for our employees and the returns it will deliver for our shareholders."

Shire directors had rejected four previous bids from Takeda for the company. However, they have now recommended their shareholders approve the latest takeover offer.

Dr Flemming Ornskov, Shire chief executive, said: "With a truly innovative portfolio and pipeline, I believe that the combination of the two companies is in the best interests of shareholders and offers an opportunity to improve the lives of even more patients globally with rare and highly specialised conditions."

According to the companies' announcement, the merger is expected to take effect some time in the first half of 2019. It will provide the merged entity with a leading position in the Japanese and US markets and bring together the companies' different strengths, it said.

"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, and Takeda has a productive early stage development and research-orientated R&D program," the investor statement said.

Corporate law expert Thilo Schneider of Pinsent Masons, the law firm behind Out-Law.com, said: "The deal struck between Shire and Takeda reflects what we see in the pharma M&A space at the moment – buyers are looking for access to new products to replace decreasing revenue from ageing patents."

"In the past we have seen a steady interest from US buyers and it is exciting to see a Japanese bidder making such a splash in the UK market. From what we can see as advisors to the industry, strategic acquisitions and disposals will remain a key aspect of the pharma M&A landscape in 2018 and beyond," he said.

Takeda said that the deal also offers the opportunity to operate more efficiently. It has said that at least $1.4bn (£840m) of annual savings could be achieved within three fiscal years of the merger completing. Savings will be mainly be achieved by removing duplication in R&D and rationalising ongoing research across the two organisations, and through other measures such as office consolidations, streamlining of IT systems, merging back office functions and optimising sales and marketing activities, it said.

The deal is subject to potential regulatory oversight from competition authorities in Europe, the US, China, Japan and Brazil.