Shire Pharmaceuticals to Merge with Roberts Pharmaceutical Corporation in £1.5 Billion Deal

Strategic Insights -

Shire Pharmaceuticals, a UK-based drugs company, is poised to announce a major merger with Roberts Pharmaceutical Corporation, a US-based marketing-led drugs company. The deal, worth £1.5 billion, aims to create a global pharmaceutical giant. Shire's CEO, Rolf Stahel, is expected to lead the enlarged group, despite the deal being presented as a merger of equals.

Key Takeaways:

  • The merger between Shire and Roberts will create a pharmaceutical company with a market capitalization of approximately £1.3 billion (£820 million + £500 million).
  • Shire's latest figures show the company is forecast to make profits of almost £30 million this year, surpassing Roberts' 1998 operating profits of $27.4 million (£17.4 million).
  • Shire's growth is driven by two large American acquisitions made in 1997, while Roberts' big sellers include Pentasa for ulcerative colitis and ProAmantine for low blood pressure.
  • Roberts has a larger market share than Shire, with sales of $175.5 million (£110 million) in 1998, compared to Shire's 1998 figures.
  • The new group will have a global presence, with Shire's operations in the UK and Republic of Ireland and Roberts' marketing operations in North America.
  • The merger will be Rolf Stahel's largest deal, with Roberts Pharmaceutical Corporation being the largest company Shire has acquired to date.

Statistics:

  • Market capitalization of the merged company: approximately £1.3 billion
  • Shire's forecast profits: almost £30 million
  • Roberts' 1998 operating profits: $27.4 million (£17.4 million)
  • Shire's 1998 figures: forecast profits of almost £30 million, market capitalization of £620 million
  • Roberts' sales: $175.5 million (£110 million) in 1998
  • Pentasa's sales: contributed significantly to Roberts' sales
  • ProAmantine's sales: a major contributor to Roberts' sales
  • Year of acquisitions by Shire: 1997
  • Year of sales figures for Roberts: 1998

Sources:

  • "Shire mulls £1.5bn merger with Roberts", The Times, 1999
  • "Shire Looks to Expand in US Market", 10 December 1998, The Times
  • "Shire says it turned down Medeva offer", 9 December 1998, The Times
  • "Pharma.com and service provider, Eurolab, partner on website and broadband initiative, announced December 8, 1998"