Shire to buy Baxalta for US$32bn

Shire has agreed a US$32bn takeover of Baxalta.

Under the agreement, Dublin-based Shire will pay $47.50 a share for Baxalta, which represents a 37.5% premium over the US company's share price before Shire's initial offer on 3 August 2015.

The transaction is expected to close in the middle of this year.

Flemming Ornskov, Shire's Chief Executive, said a combination of the two companies would create the leading biotechnology company focused on treatments for rare diseases, with projected revenues of more than $20bn by 2020.

'Together, we will have leadership positions in multiple, high-value franchises and become the clear partner of choice in rare diseases,' he said.

Shire also anticipates that it will realise more than $500m in annual cost savings (expected to be achieved within the first three years after completion) by increasing efficiencies, leveraging the scale of the combined business and optimising the combined R&D portfolio.

Baxalta's Chief Executive Ludwig Hantson, who in August last year said the deal was not in the best interests of Baxalta shareholders, said the transaction presented a 'unique opportunity for Baxalta shareholders, who will receive substantial immediate value as well as an ongoing stake in a combined global leader in rare diseases with strong growth prospects'.

The combined company will have products in the multi-billion dollar franchises of Haematology; Immunology; Neuroscience; Lysosomal Storage Diseases; Gastrointestinal/Endocrine; and Hereditary Angioedema (HAE). It will also have a growing franchise in Oncology, with approved products and innovative compounds in development, as well as a robust late-stage Ophthalmics pipeline.

Further, the combined company will benefit from expanded geographic reach across more than 100 countries. In total, the proposed combination will create a sustainable platform for future innovation and growth, yielding projected near- and long-term value for shareholders, the firms said.