Dublin-based drug manufacturer Shire will take over US pharmaceutical company Baxalta in a $32bn (£22bn, €29.4bn) deal, the UK-listed firm confirmed in a statement on Monday (11 January). The agreement marks the end of a six-month pursuit by Shire.
Baxalta shareholders will receive $18 in cash and around one-seventh of a Shire American depositary share per Baxalta share, should the deal go ahead. The offer values Baxalta shares at $45.57, representing a 37.5% premium to the shares' value in early August 2015, when news of the takeover talks broke in the City.
"Together, Shire and Baxalta create a platform for sustainable innovation, growth and value creation," Susan Kilsby, Shire Pharmaceutical's chairwoman, said in a statement. "Shire is an experienced and disciplined acquirer with a track record of delivering shareholder value."
"Stakeholders of both companies are expected to benefit from the enhanced growth prospects, superior operational scale and efficiency and the strong financial and organizational profile of the combined entity," she added.
If the deal goes ahead, it would be the biggest ever takeover by Shire, most famous for its ADHD treatments. Baxalta turned down two separate offers made by the Dublin-based firm. In August, Shire first approached the firm with a $30bn (£20bn) bid.
According to Shire's chief executive Flemming Ornskov, the companies' combined revenue could be more than $20bn (£13.7bn) by 2020. The merged firm would mostly benefit from opportunities to develop drugs against rare diseases. The deal would also continue the trend of mergers and acquisitions in the pharmaceutical sector.
According to the Financial Times, the value of M&As in the sector reached $550bn (£378bn) in 2015, with the $160bn (£110bn) Pfizer and Allergan 'reversed takeover' leading the way and set to create the largest healthcare company in the world. Both the Pfizer and Allergan tie up as well as the possible Shire and Baxalte merger connect US and Irish companies.
Shire's share price fell more than 5.6% after the deal was announced. Baxalta shares jumped 1.5% shortly after the opening bell rang in New York.