Takeda Plans to Sell $10 Billion in Non-Core Assets to Offset Debt of the Shire Deal

Takeda logo on outside of tall office building

On Tuesday, Takeda Pharmaceutical finally wrapped up its $62 billion acquisition of Shire. As the combined companies continue to merge and shape their combined roles, Chief Executive Officer Christophe Weber is already eying potential deals to offset some of the debt the company garnered.

In an interview with Bloomberg, Weber said the company has made significant strides in establishing its new leadership structure following the merger. Later this week, Takeda plans to hold a leadership conference with the top 200 leaders of the combined companies, Weber said. The integration of the company is “very well advanced,” he told Bloomberg.

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The acquisition of Shire gives Takeda a significant focus on rare diseases, as well as a much larger footprint in the U.S. drug market, the biggest market in the world.

However, there has been some negative fallout from the deal. In December, Takeda’s credit rating was downgraded by Moody’s due to the significant debt the company incurred in order to secure the deal. The credit rating was cut to Baa2, Bloomberg reported at the time. This week, S&P Global Ratings also downgraded Takeda.  Despite the cuts, Takeda is still considered “investment grade,” something Weber said was important. But, Weber noted that the company will rapidly begin to address the debt level.

As BioSpace noted earlier this week, Weber is eying the potential of unloading $10 billion in assets to deleverage the $30 billion in debt it took on to acquire Shire. That means that the company will be divesting a significant amount of assets.

In his interview with Bloomberg, Weber said that 75 percent of the company’s business is considered a core asset. That leaves to 25 percent of the entirety of Takeda’s portfolio where the company will find assets that could be sold off to reduce some of the debt. Weber said the company has already begun a process of identifying some of the assets that it will use as a debt-saving tool. Now, the company needs to find some buyers who will be willing to acquire the assets for about $10 billion, Weber said.

“Some of these products are non-core for us, but might be core for others,” Weber told Bloomberg.

While Weber did not disclose any potential buyers, he noted that other pharma companies or equity firms could be in the running to pick up the assets. He noted that it will largely depend on the assets being sold off. Some of those have global applications, while others are more localized. The assets will likely determine the buyer, he noted.

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