Japan's Takeda buying Nycomed for $13.6 billion

[May 19, 2011]  TOKYO (AP) -- Takeda Pharmaceutical Co. said Thursday it will buy Switzerland's Nycomed for $13.6 billion, giving Japan's biggest drugmaker coveted access to emerging markets.

The all-cash deal is the largest ever overseas takeover by a Japanese pharmaceutical company and underscores Takeda's aggressive efforts to expand globally. The Osaka-based company is particularly keen to tap into rapidly growing regions such as Asia, Russia and Latin America.

Nycomed's products are sold in more than 100 countries. Europe accounts for about half its revenue, while emerging markets comprise 39 percent of sales. Its products include prescription drugs, such as the lung-disease drug Daxas, and drugs for common complaints such as gastric pains, allergies, asthma, chronic pain and osteoporosis.

Takeda described the deal as a "strategic fit" with its growth strategy. It will pay 9.6 billion euros ($13.6 billion) for the privately held company, using loans of 600 billion yen to 700 billion yen to partially finance the purchase.

"Takeda is committed to transforming our organization through the acquisition of Nycomed," said Takeda President Yasuchika Hasegawa in a statement. "Nycomed enables Takeda to maximize the value of our portfolio and gives us an immediate strong presence in the high-growth emerging markets while doubling Takeda's European sales."

Nycomed is owned by private equity firms Stockholm-based Nordic Capital, Credit Suisse affiliate DLJ Merchant Banking Partners, Coller Capital and New York-based Avista Capital Partners.

Takeda has high hopes for Daxas, which it expects to be a major driver of revenue growth. The sales could help offset the impact of looming patent expirations facing Takeda's best-selling diabetes drug Actos.

Daxas is the European brand name for roflumilast, which was approved earlier this year by the U.S. Food and Drug Administration under the name "Daliresp." The new drug is designed to reduce symptoms of chronic obstructive pulmonary disease in patients whose condition is associated with chronic bronchitis.

Even though Takeda is Japan's No. 1 drugmaker, it remains a relatively small player on the global stage. Its annual sales of 1.42 trillion yen ($17.4 billion) represent about a quarter of the sales of No.1 drugmaker Pfizer Inc. About 85 percent of Takeda's sales come from Japan and the U.S.

The Nycomed purchase will push Takeda up four notches to No. 12 in the global pharmaceutical sales rankings, the statement said.

The deal is Takeda's biggest since buying Massachusetts-based Millennium Pharmaceuticals for $8.8 billion in 2008.

The boards of both companies have unanimously approved the transaction, which is expected to be finalized within 90 to 120 days pending antitrust clearance, Takeda said. The purchase excludes Nycomed's U.S. dermatology business.

If the deal goes through, it will be the second major takeover of a Swiss pharmaceutical company in as many months.

In April, Johnson & Johnson agreed to buy medical device maker Synthes Inc. for $21.3 billion.

According to its website, Nycomed recorded net sales of 3.2 billion euros ($4.6 billion) last year. The company employs 12,500 people in over 70 countries.

[Associated Press; By TOMOKO A. HOSAKA]

Associated Press writer Frank Jordans in Geneva contributed to this report.

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