Shire and Baxalta

Baxalta’s History
Based in Bannockburn, Illinois, Baxalta (BXLT) is a leading global biopharmaceutical company that was founded on July 1, 2015. The company was formed through a spin-off from healthcare giant Baxter International (BAX). Prior to the spin-off, it was Baxter’s biopharmaceutical division.
Shire’s History
Shire is the leading global biotechnology company focused on serving people with rare diseases and other highly specialized conditions. We have best-in-class products available in more than 100 countries across core therapeutic areas including Hematology, Immunology, Neuroscience, Lysosomal Storage Disorders, Gastrointestinal / Internal Medicine / Endocrine and Hereditary Angioedema; a growing franchise in Oncology; and an emerging, innovative pipeline in Ophthalmic.
Shire, Baxalta Complete $32B Merger
Shire has completed its $32 billion merger with Baxalta, creating what it called the global market leader in rare diseases and other specialized disorders.
Shire is based in Dublin, Ireland, for tax purposes but maintains its U.S. headquarters in Lexington. Adding the more than 400 employees at Baxalta’s Kendall Square research and development center to the 2,600 Massachusetts employees with which Shire ended last year means Shire is now the second-largest biotech employer in the state after Sanofi Genzyme, and the largest stand-alone drug maker which, for all intents and purposes, is operated out of Massachusetts.
However, Dr. Ornskov told The Boston Globe in a report published today that Shire is seeking to expand at least one of the combined company’s facilities—the R&D site opened by Baxalta last December at Kendall Square in Cambridge, MA, by adding 100 to 200 employees to the site’s workforce of more than 400.
Baxalta shareholders will receive a combination of $18 in cash and 0.1482 Shire ADS’s for each Baxalta share—or 0.4446 of a Shire ordinary share if the Baxalta shareholder validly elected to receive ordinary shares.
As a result of the merger, the appointments of Baxalta board members Gail D. Fosler and Albert P.L. Stroucken to Shire’s board as none .Shire will provide a full and unconditional guarantee of Baxalta’s obligations to the holders of Baxalta’s outstanding senior notes.
The efficient operating structure of the combined company is expected to yield annual operating cost synergies of at least $500 million within the first three years post-closing. Further, Shire expects to generate additional revenue synergies and a combined non-GAAP effective tax rate of 16-17% by 2017. The combination is expected to be accretive to non-GAAP diluted EPS in 2017, the first calendar year of ownership, and beyond, with an attractive ROIC that will exceed Shire’s cost of capital in 2020.Executive directors have taken effect.
by: DEVIKA SHARMA