Dublin-based drugmaker Shire has clinched its six-month pursuit of Baxalta International with an agreed $32 billion (€29.4bn) cash and stock offer, catapulting it to a leading position in treating rare diseases.
The Irish-domiciled and London-listed company, which first approached the US firm with an all-stock offer in July, won over the maker of treatments for rare blood conditions, cancers and immune system disorders after adding a cash sweetener.
Shareholders will receive $18 in cash and 0.1482 Shire American depositary shares per Baxalta share, implying a total value of $45.57 per share based on January 8 prices.
The deal marks a strong start to mergers and acquisitions in healthcare in 2016 after the sector saw its biggest deal-making streak in history last year, with global deals totalling $673bn, according to Thomson Reuters data.
Thanks to its base in Dublin, the combined company is expected to have an effective tax rate of 16%-17% by 2017, down from around 23% for Baxalta, making the deal the latest transaction to result in lower tax rates.
Together, the two companies said they expected to deliver double-digit sales growth with more than $20bn in annual revenues by 2020.
Illinois-based Baxalta, which was spun off last year from Baxter International, rejected Shire’s previous $30bn all-stock offer in August, arguing it significantly undervalued the company.
But Shire CEO Flemming Ornskov relentlessly pursued Baxalta, seeking to pressure it into agreeing to a deal by meeting with Baxalta’s major shareholders over a period of months.
Mr Ornskov added cash and raised the offer price to offset the loss of a tax benefit shareholders would have received if the company remained independent.
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