A hot weekend for takeover deals and cycle racing

The bank holiday turned out to be a hot one, not least in the takeover arena. First, Shire Pharmaceutical accepted a £46 billion offer from Takeda of Japan — though the stock market did not seem wholly convinced that the deal will proceed. If it does, should we care?

Shire is a FTSE100 company that began in the UK and ended up stateless. As a start-up in Basingstoke in 1986, it made calcium-based treatments for osteoporosis; since then it has grown by acquisition to become ‘the world’s leading global biotechnology company focused on serving patients with rare diseases’. In 2008, when it was the UK’s third biggest drug manufacturer, Shire shifted its domicile to take advantage of Ireland’s ultra-low corporate tax rates. In 2013, when it bought the Pennsylvania-based Viro-Pharma group and signalled a reduction in its presence here, the FT called Shire’s strategy a ‘fresh blow to UK life sciences’.

The group is now based in Dublin and run by a Dane, with key sites in Massachusetts and Switzerland; two years ago it announced plans to wind down in Basingstoke. In short, Shire left these shores in spirit long ago; hence there’s no reason to regret its proposed marriage with Asia’s largest pharma group, Takeda. Yet I can’t help wondering what differences in tax policy, research incentives and the nurturing of science skills over the past 30 years might have persuaded Shire’s bosses that the UK would always be the best base from which to build a global empire.

A stronger challenger?

The other impending deal of note was a £1.6 billion all-share offer for Virgin Money from CYBG, parent of Clydesdale and Yorkshire Bank. This would create a six-million-customer ‘challenger bank’ — eclipsing the likes of TSB, currently crippled by IT problems, and Metro Bank — and would be a potent combination of Virgin marketing clout with CYBG reach, which includes a foothold in small-business banking.