Baxalta Shire Merger Agreement

Shire said today that it has completed its $32 billion merger with Baxalta, creating what it calls the world leader in rare and other specialized diseases. The deal would be reached after Reuters first reported on December 22 that Shire`s latest offer on Baxalta met Baxalta`s valuation expectations. It would be one of the largest mergers in the health sector in 2016. The deal marks a good start for healthcare mergers and acquisitions in 2016, after the sector had its biggest run of deals making in history last year, with global deals of $673 billion, according to Thomson Reuters data. Baxalta said the termination fee for the Shire merger was $369 million. Shire plc (LSE: SHP,NASDAQ: SHPG) and Baxalta Incorporated (NYSE: BXLT) announced today that the boards of directors of the two companies have entered into an agreement combining Shire and Baxalta. Under the agreement, baxalta shareholders will receive $18.00 in cash and 0.1482 Shire ADS per Baxalta share. Based on the closing price of Shire ads on January 8, 2016, this represents a total current value of $45.57 per Baxalta share, representing an overall vision of approximately $32 billion. The exchange rate is based on Shire`s 30-day weighted average ADS price of $199.03 as of January 8, 2016, for a total value of $47.50 per Baxalta share. Both parties are confident that the tax problems will arise from baxalta`s relocation of Baxter International Inc. BAX.

N will not be an obstacle to the transaction, but awaits formal legal advice before signing their merger contract, people add. Following the merger, the appointments of Baxalta board members Gail D. Fosler and Albert P.L. Stroucken to the shire Board of Directors took effect as non-executive directors, Shire said. Shire has implemented additional tax due diligence and, on the basis of this diligence, Shire and its tax advisor have concluded that a merger with the proposed cash payment of $18 per Baxalta share will maintain the non-tax status of the baxalta de Baxter demerger. The completion of the Shire Baxalta merger comes a week after shareholders of both companies voted in favour of the deal. Shire and Baxalta announced plans to merge in January, with Shire saying it expected to achieve more than $500 million in cost reductions or “synergies” within the first three years of the deal. Shire signed an $18 billion facility to finance the latest purchase. “Once our combination with Baxalta is complete, Shire is now the world leader in rare diseases, with the rare disease platform based on both revenue and pipeline programs,” Shire CEO Flemming Ornskov, M.D., M.P.H., said in a statement.

The combined company would consist of more than 22,000 employees in more than 100 countries and more than 50 clinical development programs balanced by early, medium and late-stage projects. Adjusted EBITDA for the year ended December 31, 2014 is GAAP`s pre-tax tax on continuing operations excluding depreciation and amortization of US$206 million and other expenses of US$104 million and adjusted for other exceptional influences and form adjustments (related to Baxter`s separation) of $363 million.

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