Economy

Shire sells oncology business to France's Servier for $2.4bn

Shire sells oncology business to France's Servier for $2.4bn”

Shire is to sell its oncology business to France's Servier for $2.4 billion, in a move seen as a deterrent to a takeover by Takeda.

The drug-maker's board has given the green light to the deal, which does not require shareholder approval and is now expected to close in the second or third quarter of 2018.

He added that the money raised from the transaction "increases optionality" for the company and may be deployed to buy back shares "after the current offer period regarding Takeda's possible offer for Shire concludes" on 25 April.

Shire chief executive Flemming Ornskov said: "This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio".

The agreement comes as Takeda's chief executive Christophe Weber is reported to be in the USA canvassing investor support for a potential bid for Shire, and will no doubt complicate attempts to put a fair value on the business with just a few days to go before the Japanese company must propose an offer or press pause for six months as required under European Union takeover laws.

Shire's London-listed shares were up as much as 1.8pc at the start of trading.

The deal comes as Takeda boss Christophe Weber is understood to be lining up meetings with its major holders ahead of making a potential £35bn offer for Shire.

Takeda, which was founded in 1781 and employs 30,000 people, has a strong presence in emerging markets and operates in more than 70 countries.

The Japanese company had said that it was interested in Shire to strengthen its presence in oncology, gastroenterology and neuroscience, which suggests that Shire's divestment of oncology might make it less attractive.

Shire's oncology business includes marketed products Oncaspar (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukaemia.

When stripped of legacy Baxalta sales, revenues rose only 11% to $1.8bn.

Servier Group president Olivier Laureau said: "The acquisition of Shire's oncology franchise enables Servier to meet its strategic ambitions to become a global key player in oncology".

"Our goal is to bring these treatments to greater numbers of cancer patients around the world".



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