Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary shares for each share, the companies said. The companies expect the deal to close in the first half of next year.
"We firmly believe that this combination recognizes the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve", Shire Chairman Susan Kilsby said in the statement.
For the deal between Takeda and Shire to proceed, 75% of Shire's voting shareholders must support the transaction.
Takeda will fund the cash portion of the proposed acquisition, through a $31-billion bridge loan facility secured from JPMorgan Chase Bank, Sumitomo Mitsui Banking Corp and MUFG Bank, among others.
Shire's shares, which had been trading about 10 pounds below the value of Takeda's offer, traded 4 percent higher at just over 40 pounds, still well under the agreed price and indicating that shareholders still have reservations.
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Operating profit had previously fallen for five straight quarters, and missed Wall Street forecasts for eight straight. In Friday trading, the Class A shares closed at$292,600, and the Class B shares at $195.64.
Christophe Weber, Takeda CEO, commented on the acquisition of Shire's "highly complimentary product portfolio and pipeline", saying that it will accelerate Takeda into a strong company, targeting gastroenterology, neuroscience, oncology, rare disease, and plasma-derived therapies.
The acquisition is expected to see Takeda gain potentially promising new drugs and also to expand its sales channels.
If it materialises, the deal would give Takeda greater access to the U.S. and European healthcare markets. Japan's Nishimura & Asahi and offshore firm Ogier also advised Takeda. Takeda Oncology is based in Cambridge, MA. The company was saddled with debt from its $32 billion acquisition of Baxalta in 2016, a widely criticized deal, while generic drug makers have stepped up competition. Last year, the company expanded its footprint in the United States oncology market with the US$4.7 billion purchase of Ariad Pharmaceuticals.
The announcement follows a string of lower offers rejected by Shire over the past month.
Takeda said it would maintain its headquarters in Japan and would evaluate consolidating Shire's operations into Takeda's in the Boston area, in Switzerland and in Singapore.