Shire in Talks for US$30 Billion Baxalta Bid

Published Date : Aug 10, 2015

The London listed pharmaceutical giant Shire is about to begin their formal takeover negotiations with their U.S. rival Baxalta. The deal could possibly go beyond US$30 billion.

The pharma industry has seen large amounts of activity in terms of takeovers. The Anglo-Irish drug company Shire had almost merged with AbbVie in 2014. AstraZenica on the other hand fended off the proposals made by Pfizer.

Shire, an FTSE-100 company, has revealed that they have reestablished negotiations with Baxalta within a month of announcing an initial bid of US$30 billion, which was recently rejected by the U.S. based company.

The proposal made to Baxalta was made public by Shire, who also claimed that the takeover would essentially create the world’s greatest specialist in rare diseases. It could generate Shire more than US$20 billion in product sales by 2020.

Initially, Shire had said that Baxalta had declined to engage in any formative decisions regarding the takeover. The takeover itself was supposed to occur on the 10th of July.

Flemming Ornskov, the CEO of Shire, said in last week’s release, that the combined body will have a chance to generate a massive shareholder value inside of a highly attractive and fast-growing segment in the healthcare industry. The joint force of the two companies would be estimated to earn US$20 billion in terms of product sales by 2020, and consequently generate enough to invest further in developments and innovations in the rare diseases segment.

Although the initial proposal made by Shire was rejected by Baxalta, Ornskov and Susan Kilsby, his chairman, have been travelling to the U.S. to meet Baxalta’s shareholders. The shareholders are showing signs of being in favor of the tie up.