A blister pack containing Mezavant XL anti-inflammatory tablets, produced by Shire Plc, sits on a pharmacy counter. (Photographer: Chris Ratcliffe/Bloomberg)

Takeda Clears Hurdle for $62 Billion Shire Deal

(Bloomberg) -- Takeda Pharmaceutical Co. cleared a hurdle for its $62 billion acquisition of Shire Plc, receiving unconditional approval from the U.S. Federal Trade Commission two months after sealing its biggest deal ever.

The purchase remains subject to a number of conditions, the Japanese company said in a statement Tuesday, including other regulatory clearances and approval by shareholders of both companies.

The FTC’s nod gives a further boost to Chief Executive Officer Christophe Weber’s efforts to sell the deal to investors. Japanese shareholders have been in the forefront of those criticizing the company’s expansion plans and voicing concerns over risks the purchase poses to Takeda’s dividend and credit ratings.

“One of the biggest steps Takeda has to go through is getting approval from their shareholders, and the fact that they got approval from the U.S. will help convince shareholders about the deal,” said Kyouko Amemiya, senior market adviser at SBI Securities Co.

Wider Reach

Takeda’s takeover of U.K.-listed Shire will radically transform the Japanese drugmaker, giving it wider reach and strengthening its global pipeline for lucrative products that treat rare diseases. Nearly half of the combined company’s revenue will come from the U.S., while sales from Japan will shrink to 19 percent of the total from 34 percent.

While the deal received quick approval from the U.S., it could face tougher scrutiny in Europe. Pharmaceutical acquisitions often face detailed reviews from the European Commission as regulators look at how drugmakers compete in each of the bloc’s 28 nations, where national health systems purchase and finance drugs in different ways.

European regulators should ultimately give the transaction a nod, according to Bloomberg Intelligence analysts Aitor Ortiz and Elizabeth Krutoholow. While there is broad overlap in the companies’ neuroscience and gastrointestinal franchises, their products work differently and are unlikely to be seen as competing with one another, they wrote in May.

Credit Suisse analyst Fumiyoshi Sakai said Takeda and Shire would need to get regulatory approvals from major markets including the European Union, Japan, China and Brazil, plus about 20 other jurisdictions. Takeda plans to call an extraordinary meeting for a vote after it obtains the approvals.

The Japanese company’s stock, which fell as much as 20 percent after announcing its interest in Shire, has been rebounding in recent weeks on expectations the deal will be approved. Takeda got an indirect endorsement for the takeover last month, when shareholders voted down a proposal at Takeda’s annual meeting that many had looked to as a gauge of investor dissatisfaction with the deal.

©2018 Bloomberg L.P.