UK/US: Shire, Baxalta Tie the Knot in $32B merger

Shire and Baxalta ended months of M&A speculation Monday morning by announcing a $32 billion merger that the companies said would create a global market leader in rare diseases.

The boards of both companies have approved the deal, which is subject to approval by shareholders of Shire and Baxalta, plus regulatory approvals, redelivery of tax opinions delivered at signing, and other customary closing conditions. The deal is expected to close in mid-2016.

The companies projected they would generate more than $20 billion in combined annual revenues by 2020—a benchmark Shire has committed to in recent years—with rare disease holdings expected to account for 65% of total revenues.

“In sum, the combination will provide multiple billion-dollar franchises, each with best-in-class products and a platform for sustainable innovation, sustainable growth and value creation,” Shire CEO Flemming Ornskov, M.D., said this morning on a conference call with analysts. “This combination will create an industry-leading platform with significant opportunity for future growth.”