Cross-Border Acquisitions Acquisition International Cross-Border Acquisitions: Takeda's Case Study

Excerpt from Case Study :

Cross-Border Acquisitions Acquisition

International cross-border acquisitions: Takeda's acquisition of Nycomed

In May 2011, the Japanese Takeda Pharmaceuticals bought Nycomed, a Swiss pharmaceutical company. Although Asia's largest drug manufacturer Takeda paid 9.6 billion Euros for Nycomed it will be able to operate the company debt-free, primarily because of the strong Japanese Yen's value in relation to the Euro (Harner 2011). Although Japanese companies have been famously insular in the past, doing business abroad at present is so cheap in comparison with the costs of operating domestically, more and more Japanese companies are looking to enhance their value through international cross-border acquisitions.

Nycomed would add considerable value to Takeda. Nycomed "would broaden Takeda's reach in emerging markets and add products for heartburn and smokers' cough. Takeda will focus on medicines for unmet needs and tapping new markets as blockbuster pills become harder to find" (Torsoli, Matsuyama & Ewing 2011). Takeda is concerned that the patents for some of its most popular products are running out, particularly that its diabetes pill Actos will be overcome by cheaper generic competitors. Many of Nycomed's product lines cater to more lifestyle-related and personal care needs. These medications often have a steadier, more sustained demand than drugs for more medically serious conditions. Takeda has had concerns in the past about stabilizing its cash flow which it hopes will be met through Nycomed.

Nycomed does not only have over-the-counter medications under its outreach. It is a highly diversified company. Nycomed has produced a drug that is the "first-in-class treatment for chronic obstructive pulmonary disease (COPD), which is expected to be a major source of revenue growth for Takeda" (Takeda to Acquire Nycomed, 2011, Nycomed). It also offers a wide range of dermatological products that have been successful in the U.S. market.

"The acquisition will bring Takeda an immediate and stable increase in cash flow with Nycomed's more than 2.8 billion Euro in annual…

Sources Used in Document:

References

Harner, Stephen. (2011, August 20). Strong Yen fueling Japanese cross-border acquisitions.

Forbes. Retrieved September 2, 2011 at http://www.forbes.com/sites/stephenharner/2011/08/20/strong-yen-fueling-japanese-cross-border-ma/2/

Takeda to Acquire Nycomed. (2011). Nycomed. Retrieved September 2,

2011 at http://www.nycomed.com/media/news-releases/2011/takeda-to-acquire-nycomed/

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