Pharma giant announces successful conclusion to the long-running negotiations

Shire has agreed a deal to buy Baxalta in a deal that has been on the table for some time, the two pharmaceutical companies have announced.

The deal to acquire Baxalta values the company at $45.57 per share, although the share price did dip by 8% as news of the deal broke.

The proposed deal has been going back and forth for almost six months amid concern from parties on both sides about the potential impact. In the end Shire CEO Flemming Ornskov overcame any resistance to push the deal through.

Baxalta CEO Ludwig Hantson was one of the deal’s fiercest critics in the early days – calling the approach “puzzling”. But he has since come out in support of the partnership with Shire.

“This represents a unique opportunity for Baxalta shareholders, who will receive substantial immediate value as well as an ongoing stake in a combined global leader in rare diseases with strong growth prospects,” he said.

Professor John Lyon from Warwick Business School praised the deal as positive for both sides.

“It is always good to see deals that make good strategic sense and this is one of them,” he said.

“Shire has set out its future as a global leader in rare diseases and this deal augments that strategy with Baxalta – another specialist in rare diseases – having expertise in bleeding disorders, immunology and oncology.

“The deal is hardly a surprise. Last year Shire sought a deal as a stock purchase and were rebuffed. In the courting process, they put forward an improved offer with a 40% cash component, increasing the value from $45 per share to $48 per share. 

“Shire did not have a smooth year during 2015 when the US Food and Drug Administration rejected the company’s application for a ‘dry eye’ indication, where further clinical trial data was demanded. But this deal, if completed, will add to Shire’s pipeline which makes good sense.”