Shire to buy Baxalta for $32 billion, forging rare diseases leader

“Together, Shire and Baxalta create a platform for sustainable innovation, growth and value creation”, said Shire’s chair Susan Kilsby.

Dublin-based Shire has agreed to pay $47.50 per share, $18 of which will be in cash, to acquire the Deerfield, Ill.-based company, which spun out from parent Baxter International Inc.in July.

Shire added that it expects to generate additional revenue synergies and a combined non-GAAP effective tax rate of 16-17% by 2017.

Based on Shire’s closing ADS price on January 8, this implies a total current value of $45.57 per Baxalta share, representing an aggregate consideration of around $32 billion. The deal will advance the desire of Shire, best known for hyperactivity treatments, to broaden its range of rare disease treatments. The company has a market cap of $27.15 billion.

Shire, the London-listed drugs company, has agreed to buy Baxalta $32bn (£22bn) after receiving assurances that it will not face a big tax bill in the USA by including cash in its bid.

Shire has been pursuing Baxalta, the maker of treatments for rare blood conditions, cancers and immune system disorders, for about six months.

Commenting on the announcement, Shire Chief Executive Officer Flemming Ornskov, M.D., M.P.H., said: “This proposed combination allows us to realize our vision of building the leading biotechnology company focused on rare diseases”.

Shire has secured an $18 billion bank facility to finance the combination.

The combined company said it will also oversee pipelines ranging from Baxalta’s oncology candidates to Shire’s candidates in ophthalmics, which include Lifitegrast, projected to launch this year pending regulatory approvals.

This will provide Baxalta shareholders with around 34 percent ownership in the combined company. Baxalta Chairman Wayne T. Hockmeyer will become deputy chairman of the combined company, and two additional directors will be included from Baxalta’s board.

Write to Denise. Roland at Denise.