Takeda could rack up $10B in selloffs after controversial Shire buyout: report

With a crucial shareholder vote looming, Takeda is on an aggressive push to win investor support for a Shire buyout expected to load the company with debt. Now, a top executive says that debt burden could be $10 billion lighter after the deal closes.

Takeda CFO Costa Saroukos told Nikkei the company could sell up to $10 billion worth of "noncore assets" to help fund the buyout, twice as much as had been reported previously. Bloomberg sources said in September that the Japanese company was considering $4 billion to $5 billion in selloffs, potentially including Shire's eye drug Xiidra.

Last month, the company tagged Shire's inflammatory bowel disease pipeline med SHP647 as a potential selloff, and Bloomberg reported that Takeda may sell some OTC assets in Europe to help fund the purchase. Meanwhile, Takeda is also sharpening its job-cutting ax to squeeze costs out of the combined company.

With the deal, Takeda will refocus on drugs in gastroenterology, oncology and rare diseases, among other disease areas. Takeda nabbed European approval for the buyout last week, and shareholders are set to vote next week.

And that vote isn’t a rubber stamp. The company needs to secure a two-thirds majority to wrap up the buy, but some insiders worry about the company’s debt and direction after the deal. Kazu Takeda, a member of the founding family who voiced opposition in September, said Takeda "will no longer be a Japanese company" if it closes the deal, according to the Financial Times.

This week, Takeda ex-chairman Kunio Takeda said in a statement to Nikkei that "after performing various analyses on my own and making a thorough assessment, I came to the conclusion that I cannot offer my support." Dissident shareholders are ginning up "no" votes, hoping to derail the transaction.

Along with the debt, Takeda and Shire also expect to pay nearly $1 billion in banking and legal fees for the merger, Reuters previously reported.

Takeda CEO Christophe Weber has stood firm in the face of resistance, saying the deal will bolster Takeda’s presence in key treatment areas and transform the company into a leader in rare diseases. He said the deal will create "global scale to drive future development," and touted other benefits.

Takeda unveiled its plan to acquire Shire in May. The buyout would be pharma’s largest M&A deal in years and would vault Takeda into the top 10 rankings of big pharma companies. 

As is standard with pharma mergers, it’ll come with layoffs and a big target for cost savings. Already, Takeda has said it’s moving its U.S. headquarters from suburban Chicago to Boston, putting 1,000 jobs in jeopardy. Some employees will receive relocation offers, a spokesperson said. Aside from that, Takeda is moving hundreds of R&D jobs to Boston, and a spokesperson said the company has cut 480 primary care sales representatives.

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