Drugs group Shire says bids $30 bn for rival Baxalta

4th August 2015, Comments 0 comments

Dublin-based pharmaceutical group Shire said Tuesday it had bid $30 billion (27 billion euros) for US rival Baxalta to form a global biotech company focused on rare diseases.

The industry is going through a period of consolidation and last week Israeli pharmaceutical giant Teva said it was buying the generic drug business of Allergan for $40.5 billion.

"We believe the proposed combination of Shire and Baxalta would be strategically and financially attractive for both of our companies, accelerating our respective growth ambitions and creating the leading global biotech company in rare diseases," Shire's Chief Executive Officer Flemming Ornskov said in a statement.

Shire said a tie-up would generate $20 billion in product sales by 2020.

The hostile all-shares bid made on July 10 was pitched at $45.23 per Baxalta share.

Flemming said it was Shire's "strong preference to immediately enter into a negotiated transaction to explore the full potential of the proposed combination and finalize the terms of an agreement".

In a release earlier this year, Shire said "rare diseases can often hide behind the symptoms of more common illnesses, which can make diagnosis extremely challenging and often lead to misdiagnosis".

Following the announcement, shares in Shire were trading down 3.40 percent at 5,535 pence on London's benchmark FTSE 100 index, which was down 0.15 percent overall at 6,678.27 points.

Last October, US pharmaceutical firm AbbVie Monday pulled the plug on a proposed $54-billion takeover of Shire -- handing the latter a $1.6-billion breakup fee.

AbbVie had said the transaction became untenable owing to the "unacceptable level of risk" following new US Department of Treasury rules intended to discourage deals in which US companies merge with foreign competitors to shift their headquarters to countries with a lower tax rate.

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© 2015 AFP

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