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Mergers and Acquisitions

Date: 2017-02-16

Type of information: Company acquisition

Acquired company: Ariad Pharmaceuticals (USA - MA)

Acquiring company: Takeda Pharmaceutical (Japan)

Amount: $5.2 billion

Terms:

* On February 16, 2017, Takeda Pharmaceutical announced the completion of its acquisition of Ariad Pharmaceuticals for $24.00 per share in cash. Takeda continues to expect the transaction to be accretive to Underlying Core Earnings by FY2018. Takeda completed the acquisition through a tender offer and subsequent merger of Aariad with Kiku Merger, a wholly owned subsidiary of Takeda Pharmaceuticals U.S.A. Ariad is now an indirect wholly owned subsidiary of Takeda. The tender offer for all of the outstanding shares of Ariad common stock expired as scheduled, on February 15, 2017. Computershare Trust Company, the depositary and paying agent for the tender offer, has advised Takeda that 158,558,628 shares of Ariad common stock were tendered, representing approximately 81.4% of the shares outstanding. All of the conditions to the tender offer having been satisfied, Takeda's indirect wholly owned subsidiary Kiku Merger has accepted for payment and will promptly pay for all shares tendered. The transaction will be funded by approximately $3.5 billion of new debt and the remainder from existing cash. Takeda is expected to remain investment grade and the transaction has no impact on Takeda's dividend policy.

* On January 20, 2017, Takeda Pharmaceutical announced the commencement of the cash tender offer by its wholly-owned indirect subsidiary, Kiku Merger, for all outstanding shares of the common stock of Ariad Pharmaceuticals at $24.00 per share. The tender offer is being made in connection with the Agreement and Plan of Merger which Takeda and Ariad announced on January 9, 2017. Upon successful closing of the tender offer, stockholders of Ariad will receive $24.00 in cash, net of applicable withholding taxes and without interest, for each share of Ariad stock. Following the purchase of shares in the tender offer, Ariad will become an indirect wholly owned subsidiary of Takeda. The tender offer is scheduled to expire on Wednesday, February 15, 2017, unless extended. The closing of the tender offer is subject to customary terms and conditions, including the tender of a number of shares which, together with shares then owned by Takeda (if any), represents a majority of the outstanding shares, and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

* On January 9, 2017, Ariad Pharmaceuticals announced it has entered into a definitive agreement to be acquired by Takeda Pharmaceutical Company under which Takeda will acquire all of the outstanding shares in ARIAD for $24.00 per share in cash, or a total enterprise value of approximately $5.2 billion , representing a premium of approximately 75 percent over Ariad's closing price on January 6, 2017 .
Under the terms of the agreement, Ariad stockholders will receive $24.00 in cash for each share of Ariad common stock they own. The transaction has been approved unanimously by the boards of directors of both companies, and is expected to close by the end of February 2017 , subject to required regulatory approvals and other customary closing conditions.
Under the terms of the agreement, the acquisition is structured as an all cash tender offer for all of the outstanding shares of Ariad common stock, followed by a merger in which remaining shares of Ariad would be converted into the right to receive the same $24.00 cash per share price paid in the tender offer.
The transaction is subject to the tender of a majority of Ariad common stock on a fully diluted basis as well as other customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the antitrust laws of applicable foreign jurisdictions. The transaction is expected to close by the end of February 2017 .
Takeda Pharmaceuticals U.S.A. , a wholly owned subsidiary of Takeda, has established Kiku Merger Co., Inc. to effect the transaction. JPMorgan, Goldman, Sachs & Co. and Lazard acted as financial advisors to ARIAD Pharmaceuticals and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as the Company's legal advisor. Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Takeda Pharmaceutical Company Limited . Evercore Partners acted as financial advisor to Takeda Pharmaceutical Company .

Details:

Ariad Pharmaceuticals' acquisition will strengthen and diversify Takeda's oncology business. Ariad's pipeline includes brigatinib, an investigational ALK inhibitor currently in phase 3  for the treatment of ALK-positive locally advanced or metastatic non-small cell lung cancer (NSCLC) who have not previously been treated with an ALK inhibitor. A New Drug Application (NDA) for brigatinib is currently under review by the FDA for the treatment of patients with metastatic ALK-positive (ALK+) non-small cell lung cancer (NSCLC) who have progressed on crizotinib. The FDA granted Ariad’s request for Priority Review and has set an action date of April 29, 2017 under the Prescription Drug User Fee Act (PDUFA). In May 2016, Ariad Pharmaceuticals has also initiated a phase 1-2 clinical trial of a new tyrosine kinase inhibitor, AP32788,  designed as a targeted therapy for patients with non-small cell lung cancer (NSCLC) with specific mutations in EGFR or HER2.

Related:

Cancer - Oncology

Is general: Yes