When Japan’s Takeda Pharmaceutical Company Limited completed its approximately $62 billion acquisition of Shire PLC on January 8, 2019, Sullivan & Cromwell played a key role as Takeda’s U.S. counsel. The deal vaults Takeda into the top 10 pharmaceutical companies globally by revenue, and is the largest-ever acquisition of a foreign firm by a Japanese company, more than double the previous largest Japanese company acquisition.
As U.S. counsel, S&C assisted Takeda in the filing of a registration statement with the Securities and Exchange Commission and in its listing on the New York Stock Exchange (NYSE), as well as in other SEC and U.S. law-related matters in connection with the acquisition. This follows S&C’s representation of Takeda in its debt offerings in November, including euro-denominated notes, which, at a total aggregate principal amount of €7.5 billion, was the largest debut euro-denominated unsecured bond offering in history, and a dollar-denominated note offering, which, at a total aggregate principal amount of $4.5 billion, was also the largest dollar-denominated bond offering by a Japanese issuer in history.
The multi-disciplinary, cross-border S&C team acting for Takeda included Keiji Hatano and Nirav Mehta in Tokyo and Cathy Clarkin in New York.
Takeda is known for its expertise in drugs aimed at the oncology, gastroenterology and neuroscience markets. The Shire acquisition is an important strategic move to expand Takeda’s sales for drugs targeted to rare diseases, which are Shire’s strength, and to increase sales in the U.S. market. Following the deal, the United States will account for about half of Takeda’s revenue.
The deal also speaks to a broader trend in Japanese M&A, which has seen Japanese corporations turn increasingly to overseas acquisitions. In December, a MarketWatch article indicated that Japanese companies were involved in 621 outbound deals year-to-date, totaling $100 billion more than the same period in 2017 (“Japan Inc. heads abroad in $180bn deal rush,” December 19, 2018), and mentioned the Takeda-Shire deal.
“Corporate Japan is focused on buying quality assets,” S&C M&A partner Frank Aquila told MarketWatch. “This is a long-term trend, and we will continue to see Japanese firms engage in this level of activity for a while.”
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