Takeda Pharmaceutical Co.’s Chief Executive Officer Christophe Weber navigated rebuffs, critics and a plunging stock price to win a $62 billion (¥6.8 trillion) deal to acquire larger rival Shire Plc.
Integrating the Japanese drugmaker — which began by selling herbal therapies 237 years ago — with the sprawling Irish company will be even more complicated.
As the Osaka-based company’s first foreign head, Weber is overseeing a dramatic makeover that will reshape Takeda into a global powerhouse with a plum suite of drugs for rare diseases. But it also leaves him with a pile of debt and the task of bringing together two companies of different sizes, cultures and areas of focus in the drug industry.
“It will go through,” Mick Cooper, a health-care analyst at Trinity Delta in London, said about the deal. “But the challenge for Christophe Weber is now making sure the integration is done properly, done quickly and efficiently to make it a success. Otherwise you’ll have created a Japanese powerhouse that might not be remembered for the right reasons.”
Takeda investors were lukewarm on the news, with shares dropping as much as 4.9 percent by the end of Tokyo trading on Wednesday. Shire’s stock jumped 4.6 percent in London trading Tuesday.
Takeda secured a bridge loan facility of about $31 billion to help pay for its purchase of Shire, in what likely is the largest borrowing ever by a Japanese company for an acquisition.
While investors and shareholders have been wary of the hefty costs of the acquisition, Weber stressed at a news conference on Wednesday that Takeda is in a “sound financial situation” and said the company “can reduce the debt level very quickly” through improved business.
“This is not a change of a strategy but an acceleration of our strategy that we think is working very well,” he said.
Weber said Tuesday he would consider selling some assets, and would pay down debt with the combined company’s increased profits and cash resources. In an interview, Weber said that the drugmaker will generate “a very significant cash flow, and that’s also part of the equation.”
Takeda said pretax cost savings will reach at least $1.4 billion annually by the end of the third fiscal year after closing, topping the expectations of some analysts. The company said the deal would also add to earnings in its first fiscal year after completion.
The deal comes at a time when Takeda faces drug-pricing pressures at home as it has few promising experimental therapies of its own.
