Shire completes $32 billion Baxalta merger

Shire has completed its $32 billion merger with biotech Baxalta in a move aimed at creating a global leader in rare diseases.

Baxalta only spun off from Baxter last summer – and Shire moved quickly to snap up the newly-formed company.

Although Baxalta initially resisted, Shire managed to seal the deal with a cash sweetener, and investors in both firms finally agreed the deal last week.

Shire said it expects the combined company to deliver double-digit annual top-line growth, with over $20 billion in annual projected revenue by 2020.

Around 65% of these revenues will be from rare disease products.

Shire CEO Flemming Ornskov (pictured) said: “We have made impressive progress on integration planning since announcing the combination, moving much faster than other transactions of similar size based on benchmarks, to create certainty for our employees and to better serve our patients and customers going forward.”

Baxalta will become an indirect wholly-owned subsidiary of Shire and its shareholders will receive a combination of $18 cash and just under 0.15 American Depositary Shares for each Baxalta share.

The merger is expected to create ‘cost synergies’ of at least $500 million within three years, and revenues will be improved by an effective tax rate of 16-17% by 2017 thanks to Shire’s Dublin tax domicile. It is expected to add to revenues in the first calendar year.

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