Shire, Baxalta to announce merger as soon as Monday: sources

Thu Jan 7, 2016 2:52pm EST
 
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By Carl O'Donnell

(Reuters) - Rare disease drugmaker Shire Pharmaceuticals Plc (SHP.L: Quote) is preparing to announce its roughly $32.5 billion acquisition of U.S. peer Baxalta International Inc BXLT.N as early as Monday, according to people familiar with the matter.

The deal would come after Reuters first reported on Dec. 22 that Shire's latest offer for Baxalta had met the latter's valuation expectations. It would be one of the healthcare sector's largest mergers in 2016.

The cash-and-stock deal will value Baxalta at around $48 per share, with a cash component just shy of $20 per share, the people said on Thursday.

Baxalta shares were trading on Thursday just under $39 and Shire stock was at $190.45 a share.

Both parties are confident tax concerns arising from Baxalta's spin out from Baxter International Inc (BAX.N: Quote) will not be an impediment to the transaction but are waiting for a formal legal opinion to come through before signing their merger agreement, the people added.

The sources asked not to be identified because the negotiations are confidential. Shire and Baxalta declined to comment.

The acquisition would mark the culmination of a long pursuit hinged partly on how much cash Shire could offer without triggering additional taxes for Baxalta. Reuters first reported Shire’s renewed effort to court Baxalta in November.

Shire has been eyeing the maker of rare disease drugs since July, when it proposed an all-stock deal for just over $45 per share that was rejected by Baxalta's board.   Continued...

 
A sign sits in front of Shire's manufacturing facility in Lexington, Massachusetts July 18, 2014.  REUTERS/Brian Snyder