Dublin-based drug maker Shire has made a new acquisition offer for peer Baxalta International that is roughly in line with the latter's valuation expectations, making a deal in the coming weeks likely, people familiar with the matter said.
An agreement would successfully end Shire’s five-month pursuit of Bannockburn, Illinois-based Baxalta and create one of the world’s leading specialists in rare diseases.
And it would continue a surge of deals in the pharmaceuticals, energy and consumer sectors has pushed merger and acquisition activity to an all-time high, surpassing 2007’s peak.
This year, global mergers and acquisition volumes have surged to a new record level, with the total value of announced transactions climbing to $4.6 trillion even before a Shire transaction, compared with $4.3 trillion eight years ago, according to Thomson Reuters data.
Many of these deals have been for tens or hundreds of billions of dollars – including the blockbuster tie-ups between drugmakers Pfizer and Allergan, brewers AB InBev and SABMiller, and oil majors Royal Dutch Shell and BG Group.
Baxalta’s board rejected an all-stock offer from Shire in August, saying it had significantly undervalued the company.
While the exact terms of the deal could not be learned, Shire has now added enough cash to its previous all-stock offer for talks to advance, the people said. Baxalta would be valued in excess of $30 billion in any deal, one of the people added.
The sources asked not to be identified because the negotiations are confidential. Baxalta and Shire spokespeople offered no comment.
The challenging deal talks with Baxalta came after Shire pursued other deals in the rare diseases sector. Shire announced on November 2nd it was buying Dyax, which manufactures treatments for a rare genetic disease, for $5.9 billion.
A combination of Shire and Baxalta would add to the more than $600 billion in healthcare merger deals this year, which has been the busiest in the history of healthcare deal making.
Baxalta develops biotech treatments for rare blood conditions, cancers and immune system disorders. It was spun off was spun off from Baxter International in July. – Reuters / The Financial Times Limited 2015
