Who – the protagonist
Christophe Weber, President and CEO of Japan-based Takeda Pharmaceuticals.
What?
Takeda’s history stretches back to 1781 when it began selling traditional Japanese and Chinese medicines in Osaka.
In 2007, Takeda was ranked 15th in global pharmaceutical sales. It was primarily active in Japan, with its board members largely Japanese, and its corporate culture the product of uniquely Japanese social and historical influences.
In 2014, after a failed merger with rival Japanese pharmaceutical company Shionogi, and their lowest profit in 15 years, Takeda’s then President and CEO Yasuchika Hasegawa appointed Weber as his successor to modernise and internationalise the company. Weber was Takeda’s first non-Japanese CEO.
Why?
Despite Japan being Takeda’s main market, the country accounted for just 9% of sales in the pharmaceutical sector.
To ensure Takeda’s survival, Weber knew he needed to acquire a similar-sized firm in order to grow. He plumped for Shire, an Irish pharmaceutical firm specialising in rare diseases and plasma-derived therapies.
But disaster struck when Shire outright rejected the bid after a leak, feeling the company was significantly undervalued.
Weber faced backlash from his own shareholders, too, as they sought to preserve the company’s Japanese heritage.
When?
It was 8 April 2018 when Shire rejected Takeda’s takeover proposal.
Weber was determined to keep plans of the takeover private, and insisted that only a small team be involved in the acquisition process.
Weber planned to contact Shire’s board on 1 April but rumours of the deal were leaked on 28 March, which forced Takeda to make the bid public on 29 March. This consisted of a £41 billion market value and a formal apology to Shire, with the bid taking the Irish firm and its advisers by surprise.
After considering the proposal with its advisers, Shire’s board unanimously rejected the bid.
Where?
Established in 1986, Shire was a UK-founded, Jersey-registered, speciality biopharmaceutical company that moved its tax domicile to Ireland in 2008, but headquartered in England. The company was listed on the London Stock Exchange, with its corporate headquarters located in Europe and the US: Dublin (Ireland), Zug (Switzerland), and Cambridge and Chicago (US).
Key quote
What next?
Weber would now have to work with his CFO, François-Xavier Roger, to determine his next steps. Should Takeda continue to pursue the acquisition? If so, given the financial constraints, how could he convince Shire to sell? How could he prevent Takeda’s minority stakeholders, who opposed the transaction, from blocking it altogether? What or who else should he consider?
On the reasons for writing the case…
Marie-Ann said: “The teaching case was born out of a Social Sciences and Humanities Research Council Canada (SSRHC) research project on foreign CEOs and research and teaching on acquisitions. We wanted to communicate the research insights to a wider student audience and decided to use the context of a high-profile cross-border M&A deal to do so. The Takeda-Shire deal allowed discussing simultaneously the rationale, risks, and structuring of a complex cross-border M&A deal and the legitimacy challenges facing foreign CEOs when implementing growth strategies.”
On the case writing challenges…
Marie-Ann continued: “The case is a result of a wonderful collaboration with two former students of mine at HEC Montréal, Olivia Charlebois and Laurent Lang, and Professor Sergey Gelman from Concordia University. Working together with them on this was very insightful.
“The case is based on rich public information and aims to link strategic and financial considerations. This can be a challenge when teaching the case to management students who lack a financial background. We wanted to make sure that the teaching note is useful for those teachers who target this type of student audience.”
On teaching the case…
She added: “This case has been taught in both online and in-person environments. Student feedback confirmed that the case helped them understand the complexities of planning and executing an acquisition offer."
On how students react to the case…
She commented: “The students enjoyed in particular the role-playing exercise, which helped them see different stakeholder perspectives, and understand the importance of taking them into account when planning an acquisition.”
On case writing tips…
Marie-Ann concluded: “Find a topic that you are passionate about; this facilitates transmitting the key learnings of the case when writing and teaching the case. Find great collaborators from different fields, including students. It is not only an enriching experience for the students, but also for a professor to have the student perspective directly incorporated into the case.”
The case
Who – the protagonist
Christophe Weber, President and CEO of Japan-based Takeda Pharmaceuticals.
What?
Takeda’s history stretches back to 1781 when it began selling traditional Japanese and Chinese medicines in Osaka.
In 2007, Takeda was ranked 15th in global pharmaceutical sales. It was primarily active in Japan, with its board members largely Japanese, and its corporate culture the product of uniquely Japanese social and historical influences.
In 2014, after a failed merger with rival Japanese pharmaceutical company Shionogi, and their lowest profit in 15 years, Takeda’s then President and CEO Yasuchika Hasegawa appointed Weber as his successor to modernise and internationalise the company. Weber was Takeda’s first non-Japanese CEO.
Why?
Despite Japan being Takeda’s main market, the country accounted for just 9% of sales in the pharmaceutical sector.
To ensure Takeda’s survival, Weber knew he needed to acquire a similar-sized firm in order to grow. He plumped for Shire, an Irish pharmaceutical firm specialising in rare diseases and plasma-derived therapies.
But disaster struck when Shire outright rejected the bid after a leak, feeling the company was significantly undervalued.
Weber faced backlash from his own shareholders, too, as they sought to preserve the company’s Japanese heritage.
When?
It was 8 April 2018 when Shire rejected Takeda’s takeover proposal.
Weber was determined to keep plans of the takeover private, and insisted that only a small team be involved in the acquisition process.
Weber planned to contact Shire’s board on 1 April but rumours of the deal were leaked on 28 March, which forced Takeda to make the bid public on 29 March. This consisted of a £41 billion market value and a formal apology to Shire, with the bid taking the Irish firm and its advisers by surprise.
After considering the proposal with its advisers, Shire’s board unanimously rejected the bid.
Where?
Established in 1986, Shire was a UK-founded, Jersey-registered, speciality biopharmaceutical company that moved its tax domicile to Ireland in 2008, but headquartered in England. The company was listed on the London Stock Exchange, with its corporate headquarters located in Europe and the US: Dublin (Ireland), Zug (Switzerland), and Cambridge and Chicago (US).
Key quote
What next?
Weber would now have to work with his CFO, François-Xavier Roger, to determine his next steps. Should Takeda continue to pursue the acquisition? If so, given the financial constraints, how could he convince Shire to sell? How could he prevent Takeda’s minority stakeholders, who opposed the transaction, from blocking it altogether? What or who else should he consider?
Author perspective
On the reasons for writing the case…
Marie-Ann said: “The teaching case was born out of a Social Sciences and Humanities Research Council Canada (SSRHC) research project on foreign CEOs and research and teaching on acquisitions. We wanted to communicate the research insights to a wider student audience and decided to use the context of a high-profile cross-border M&A deal to do so. The Takeda-Shire deal allowed discussing simultaneously the rationale, risks, and structuring of a complex cross-border M&A deal and the legitimacy challenges facing foreign CEOs when implementing growth strategies.”
On the case writing challenges…
Marie-Ann continued: “The case is a result of a wonderful collaboration with two former students of mine at HEC Montréal, Olivia Charlebois and Laurent Lang, and Professor Sergey Gelman from Concordia University. Working together with them on this was very insightful.
“The case is based on rich public information and aims to link strategic and financial considerations. This can be a challenge when teaching the case to management students who lack a financial background. We wanted to make sure that the teaching note is useful for those teachers who target this type of student audience.”
On teaching the case…
She added: “This case has been taught in both online and in-person environments. Student feedback confirmed that the case helped them understand the complexities of planning and executing an acquisition offer."
On how students react to the case…
She commented: “The students enjoyed in particular the role-playing exercise, which helped them see different stakeholder perspectives, and understand the importance of taking them into account when planning an acquisition.”
On case writing tips…
Marie-Ann concluded: “Find a topic that you are passionate about; this facilitates transmitting the key learnings of the case when writing and teaching the case. Find great collaborators from different fields, including students. It is not only an enriching experience for the students, but also for a professor to have the student perspective directly incorporated into the case.”
