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Takeda will pay $66.56 per Shire share: $30.33 in cash, with the rest in the form of 0.839 of a new Takeda share.

Shire shareholders will own about half of the combined group after the deal, which will be the biggest in the sector since 2000 if approved by shareholders.

Christophe Weber, Takeda's president and CEO, said, "Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda". When the deal closes, Takeda shareholders would hold approximately 50 percent of the combined company.

Takeda's shares climbed 4% and Shire's 3% on the news.

On May 8, Japanese pharmaceutical giant Takeda announced it had finally come to an agreement to acquire Dublin-based drug maker Shire.

Shire has profitable businesses selling drugs for hyperactivity and rare disorders but the size of the deal will make Takeda one of the most indebted drugmakers, prompting Standard & Poor's to warn of a potential credit downgrade. The buyout will place Takeda Pharma at the ninth rank in the global pharmaceutical industry by revenue. Having Shire also will increase Takeda's focus on gene-oriented treatments rather than traditional chemical compounds.

The price tag has alarmed investors in Takeda: Its shares are down 18% since it first revealed it was considering an approach for Shire in late March.

The Japanese company predicts annual cost synergies of at least $1.4 billion three years after completion, including $600 million in research and development costs, and the deal is expected to boost underlying earnings significantly from the first full year after closing.

Takeda, which has seen its market value slide to US$34 billion since announcing its interest, is taking over a much bigger rival.

"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies", he said.

Tokyo-listed Takeda's shares, however, climbed nearly four per cent to ¥4,638 (£31.50).

Takeda is the largest pharmaceutical in Japan. A year ago it bought Ariad Pharmaceuticals of Cambridge, Massachusetts.

Takeda said it would maintain its headquarters in Japan and would evaluate consolidating Shire's operations into Takeda's in the Boston area, in Switzerland and in Singapore. Takeda made four other bids over the past five weeks, all of which were rejected outright by Shire.