Shire Said in Advanced Talks to Acquire Drugmaker Baxalta

Shire Said Nearing $32 Billion Acquisition of Baxalta
  • Dublin-based company may pay about $32 billion before debt
  • Cash and stock offer could be announced as soon as this week

Shire Plc is in advanced talks to acquire Baxalta Inc. for about $32 billion in cash and stock, excluding debt, according to people familiar with the matter. 

The two drugmakers may announce a deal as soon as this week, the people said, asking not to be identified as the matter isn’t public. The price being discussed is $46.50 to $48 a share, two of the people said. Final details of the transaction are still being negotiated and the timing and structure of any offer may change, they said.

Representatives for Deerfield, Illinois-based Baxalta didn’t immediately respond to requests for comment outside of regular business hours. A spokeswoman for Shire declined to comment. The Dublin-based company’s stock fell 3.4 percent to 4,540 pence at 8:09 a.m. in London.

In July, Baxalta rebuffed an unsolicited $30 billion all-stock bid from Shire that valued the company at $45.23 a share. The U.S. drugmaker has been seeking a higher offer that includes cash, people familiar with the matter said last month.

Shire structured the original bid as an all-stock transaction to help preserve tax benefits of Baxalta’s July spinoff from Baxter International Inc. Baxalta could benefit from a lower tax rate if taken over by Shire, which has a Dublin legal address despite having many operations elsewhere. The combination would yield an effective tax rate of 16 percent to 17 percent, Shire has said. Baxalta had projected a tax rate of 23 percent in 2016.

If a deal succeeds, the enlarged company would generate $20 billion in sales by 2020, with as many as 30 new drugs to launch over five years for diseases ranging from dry eye disease to hemophilia, Shire has said.

Shire has been focusing on acquiring companies with treatments for rare conditions, including the November purchase of Dyax Inc. for $5.9 billion and the $5 billion acquisition of NPS Pharmaceuticals Inc. in February. The drugmaker has been bulking up following AbbVie Inc.’s abandoned $52 billion buyout of the company last year.

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