Takeda to Buy Millennium Pharma for $8.8 Billion (Update2)
By Kanoko Matsuyama and Hideki Sagiike
April 10 (Bloomberg) -- Takeda Pharmaceutical Co., Japan's largest drugmaker, agreed to buy Millennium Pharmaceuticals Inc. for $8.8 billion, gaining a blood-cancer medicine before the patent on its best-selling Actos diabetes pill expires in 2011.
Stockholders of Cambridge, Massachusetts-based Millennium will receive $25 a share in cash, 53 percent more than yesterday's closing price, the two companies said in a statement today. It is Japan's largest drug acquisition.
Millennium's cancer treatment Velcade widens the product pipeline Osaka-based Takeda is developing to buffer sales once Actos faces generic competition. Rival Eisai Co. agreed in December to buy U.S. drugmaker MGI Pharma Inc. for $3.9 billion to gain more cancer medicines.
``This deal will boost Takeda's drug-development flow,'' said Mitsuo Ohmi, a Tokyo-based analyst at Japan Advisory LLC. ``Millennium is a leader in genome medicine, with some promising drugs in early development.''
The U.S. company generated $265 million in sales last year from Velcade, which is sold in more than 80 countries. Overall revenue climbed 8 percent to $528 million. Millennium earned $14.9 million in net income, its first profit since 1998, according to data compiled by Bloomberg.
Takeda fell 2.5 percent to 5,410 yen on the Tokyo Stock Exchange before the announcement. Millennium gained 41 percent in the past year. The takeover premium is more than double the 23 percent Tokyo-based Eisai paid to acquire MGI Pharma.
Expanding Outside
Japanese drugmakers are expanding outside the world's second-largest drug market because domestic growth is hampered by a government policy to cut prescription-medicine prices every two years.
``Millennium has strong discovery, development and commercial capabilities led by a well-established management team,'' Takeda President Yasuchika Hasegawa said in the statement. ``Takeda is committed to becoming a global leader in oncology.''
Takeda had 1.77 trillion yen ($17.5 billion) of cash as of Dec. 31, according to financial statements. The company traces its origins to
