Shire Plc in advanced talks to acquire Baxalta: reports

04 Jan 2016

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Shire Plc is in advanced talks to acquire Baxalta Inc for around $32 billion in cash and stock, excluding debt, Bloomberg reported citing sources familiar with the matter.

A deal might be announced as soon as this week, the report said, adding, the price being discussed was $46.50 to $48 a share. Negotiations around the transactions were still  on and the timing and structure of any offer might change, they added.

Dublin-based, Shire's stock fell 3.4 per cent to 4,540 pence at 8:09 am in London.

In July, Baxalta had turned down a $30-billion all-stock bid from Shire that valued the company at $45.23 a share (See:Baxalta rejects drugmaker Shire's approach). The US drugmaker had been seeking a higher offer that included cash, Bloomberg had reported last month.

Shire's original bid, an all-stock transaction was aimed to help preserve tax benefits of Baxalta's July spinoff from Baxter International Inc. According to commentators, Baxalta could benefit from a lower tax rate if acquired by Shire, which has a Dublin legal address.

Shire chief executive Flemming Ornskov's hostile campaign earlier had drawn scepticism due in part to Baxalta's ''poison pill'' provision due to which the US company could have made it difficult for Shire to build up a stake.

According to Ornskov the combination of Shire and Baxalta would create a world leader in drugs for rare diseases such as haemophilia and the genetic disorder, Hunter syndrome, at at a time of rapid consolidation in the pharmaceutical sector.

''Together, the companies would be projected to deliver $20 bn in product sales by 2020, with the financial and operational firepower to fuel further innovation and growth in rare diseases," The Telegraphreportede last August quoting Danish-born Ornskov.

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