Shire Pharmaceuticals to Announce $1.5 Billion Merger with Roberts Pharmaceuticals

Strategic Insights -

Shire Pharmaceuticals, a leading British drug company, is set to announce a massive merger with US-based Roberts Pharmaceuticals. The deal, reportedly an all-share merger, would bring together two of the world's fastest-growing speciality drugs companies, further solidifying Shire's position as a major player in the industry. Rolf Stahel, Shire's chief executive, is expected to emerge as the dominant force in the enlarged group.

Key Takeaways:

  • Shire Pharmaceuticals is set to announce a $1.5 billion merger with Roberts Pharmaceuticals, a US-based drugs group.
  • The deal would bring together two of the world's fastest-growing speciality drugs companies, with Shire valued at around $800 million and Roberts capitalized at around $790 million ($500 million).
  • Rolf Stahel, Shire's chief executive, is expected to emerge in control of the enlarged group, with Shire shareholders holding a majority of the merged company.
  • Shire is growing rapidly, with sales of $80 million and pre-tax profits of $9 million, and analysts forecasting pre-tax profits of almost $30 million for the current year.
  • The group's profits trebled in the first three months of the year to just under $9 million on sales of $31 million, of which $22 million came from sales of its attention deficit disorder treatments.
  • Shire has access to around $1.3 billion in cash and debt to spend on acquisitions, with a priority on establishing a distribution network in Germany, France, Italy, and Spain.
  • The company is also looking to add new products to its list in the US and would not hesitate to buy a company outright to achieve its aim.
  • Shire has been one of the few successes to emerge from the pharmaceutical sector in the UK since it was floated in 1996.
  • Statistics on Shire's growth and profitability, including annual sales of $800 million and pre-tax profits of $9 million, as well as projected sales of $1 billion by 2005.

Statistics:

  • Shire Pharmaceuticals is valued at around $800 million, with Roberts capitalized at around $790 million ($500 million).
  • Shire's sales have grown to $80 million, with pre-tax profits of $9 million, and analysts forecasting pre-tax profits of almost $30 million for the current year.
  • The group's profits trebled in the first three months of the year to just under $9 million on sales of $31 million, of which $22 million came from sales of its attention deficit disorder treatments.
  • Shire has access to around $1.3 billion in cash and debt to spend on acquisitions.
  • Shire is expected to increase turnover to $1 billion by 2005.

Sources:

  • Business Week
  • The Guardian
  • Financial Times