Rare disease drug manufacturer Shire PLC’s (ADR) (NASDAQ:SHPG) is all set to buy Baxalta Inc (NYSE:BXLT) for $32.5 billion. An announcement of the deal is likely by Monday, according to sources. In 2015 the pharma and the healthcare industry witnessed a large number of high-budget mergers and purchases. Many of the deals were to offset pressures of waning product portfolios. Shire’s merger will take the trend forward into 2016.
But the agreement to purchase is marred by certain tax implication. Baxalta Inc is concerned that its spin-off from parent company Baxter International does not appear as a tax-dodge. Hence, both Shire and Baxalta have sought legal opinion on the extent of tax implications affecting the merger, prior to the agreement.
Shire PLC (ADR) (NASDAQ:SHPG) and Baxalta Inc (NYSE:BXLT) merger deal has taken some time for conclusion. Though both parties were keen on combining the price of purchase caused delays. The negotiations hinged on the price offer by Shire Plc, such that Baxalta would not have to suffer tax liabilities.
According to those familiar with the matter, the deal is concluded at roughly $48 per share. The cash component would be less than $20 per share, with the remainder part of the transaction in stock.
Rare Disease platform
Shire PLC (ADR) (NASDAQ:SHPG) has been looking for smaller companies as well as peers to help in strengthening its product portfolio. The company’s is aggressively pursuing a strategy to build a platform for rare diseases and Baxalta Inc (NYSE:BXLT) products are a perfect fit. Shire in November notified its $5.9 billion acquisition of another rare disease drug maker, Dyax Corp. (NASDAQ:DYAX)
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