Shire to spend $5.2 billion to buy NPS Pharma

Recently jilted Ireland-headquartered Shire (LSE: SHP) says it is to acquire NPS Pharmaceuticals (Nasdaq: NPSP), confirming recent speculation that it was planning such a move, after the USA’s AbbVie pulled out of a $54 billion deal to buy Shire, albeit leaving the latter with a $1.6 billion break-up fee to add to its coffers. Shire’s shares edged up 1% to £47.91 when markets opened this morning.

Shire announced late Sunday that the companies have entered into a merger agreement under which Shire will acquire all the outstanding shares of loss-making NPS Pharma for $46.00 per share in cash, for a total consideration of around $5.2 billion. Shire will accelerate the growth of NPS Pharma’s innovative portfolio through its market expertise in gastrointestinal (GI) disorders, core capabilities in rare disease patient management, and global footprint. The transaction has been approved unanimously by the boards of directors of both Shire and NPS Pharma. Even though NPS is the biggest acquisition for Shire so far, the firm expects the deal, which could close in the first quarter of this year, to be paid off quickly.

According to Mick Cooper, an analyst at Edison Investment Research, said: “The acquisition of NPS serves to underscore that Shire's appetite to become a leading biotech company has only increased since AbbVie walked away.”