Takeda’s Shire buyout has driven a wedge between the deal’s mastermind, CEO Christophe Weber, and the founding Takeda family, as a senior member of the family has publicly voiced his opposition to the $62 billion deal.
Kazu Takeda, a descendant of the company's founder, sided with a small group of opponents and said the takeover would be “disastrous” for the business. The opponents claim it would hurt the company’s philosophy of “Takeda-ism,” which entails making people happy as a key for driving profit.
“We understand that scaling up is necessary, but Takeda management has to think about the traditional corporate culture and the health of the company,” said Takeda, as quoted by The Times. “Hasty decisions on big deals should be avoided. It will lead to disaster if there are large-scale mergers and acquisitions without careful consideration.”
There it is, out on the table, the clash between a traditionalist and a Western executive aiming to bring a 237-year-old Japanese pharma giant to the global stage. Now rallied under the campaign Thinking about Takeda’s Bright Future, the family members and other shareholders have criticized the drugmaker for taking on too much debt—a $30.85 billion bridge loan to be precise—to help fund the gigantic deal that’s slated to become Japan’s biggest outbound takeover.
Weber and his management team, however, have touted it as an opportunity to build up Takeda’s leading positions in rare diseases, gastroenterology, neuroscience and oncology. Besides, Shire’s robust pipeline could also fill the near- and mid-term revenue gap at Takeda, which currently lacks late-stage assets.
A wider global footprint is also what Weber is eyeing. Japan currently still accounts for about a third of the company’s total revenue, though the market has seen sharp declines amid pricing pressure and competition. For the fiscal year ended in March, Takeda’s revenue in its home country dropped 11.4% to 580.3 billion Japanese yen ($5.2 billion). The addition of Shire will tip the balance more toward the U.S. and Europe.
Despite low support for the dissidents, the deal did raise some eyebrows when it was first rumored in March, but since then Weber has stressed the company’s cost-cutting plan that aims to reduce debt to two times EBITDA in a few years. It includes saving $1.4 billion in three years after closing and cutting up to 7% of the combined workforce.
The dissidents previously sought to thwart Weber by proposing to require shareholder approval in advance for large acquisitions like Shire. But they failed to move the needle at a shareholder meeting in June with only about 10% backing.
Next up, they hope to win at least a third of shareholder votes to quash Takeda’s proposal to issue new shares as a financing measure. They had argued the issuance “might significantly dilute the earnings per share, which is a dividend resource, and there is a danger of causing a great disadvantage to existing shareholders including institutional investors.” To do that, they’re reportedly looking for support from retail customers in Japan, which hold about 25% of shares.