Biotech firm Shire has struck a £1.68billion deal to sell its oncology business to French firm Servier ahead of a potential takeover by Takeda.
The sale, which does not need shareholder approval, is expected to close in the second or third quarter of 2018 after getting the green light from the company’s board.
The Dublin-based drug maker started looking at offloading the oncology business in December and said the process considered ‘multiple potential strategic buyers’ across Europe, Japan and the US.
Drug-maker Shire’s share price rose two per cent on Monday morning after news of the Servier sale broke
Servier was chosen as Shire believes it will ‘continue to invest’ in the business and the staff that will move as part of the deal.
Flemming Ornskov, Shire chief executive officer, said: ‘This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio. While the Oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire’s longer-term strategy.
‘We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets.’
Shire’s share price rose two per cent on Monday morning after news of the sale broke.
The proceeds from the deal could be returned to shareholders through a buyback once the deadline for Takeda’s possible offer for Shire passes, the company added.
News of a possible offer for Shire by Takeda broke emerged in March, with the rival Japanese firm said to be considering a £32 billion buyout offer.
Under takeover rules, Takeda must now make an offer for Shire or walk away by April 25.
Shire was Britain’s third-largest pharmaceuticals company, behind Glaxosmithkline and Astrazeneca, until 2008 when it moved its headquarters to Ireland for tax reasons.
Shire reported revenues of about £10.8bn and profits of more than £3bn last year.
That potential deal would come just two years after Shire itself swooped on US rival Baxalta, buying it for £22bn.