A half-dozen Global 100 firms have grabbed roles on the proposed $32 billion merger between rare disease drug makers Shire plc and Baxalta Inc.
Dublin-based Shire announced Monday that it had struck a cash-and-stock deal to acquire Bannockburn, Illinois-based Baxalta after a five-month pursuit. Back in August, Shire announced a $30 billion all-stock takeover bid for Baxalta, which was promptly turned down by the target. But Shire sweetened its offer.
The active acquirer has agreed to pay $18 in cash and 0.1482 Shire ADS for each Baxalta share.
Baxalta, a biopharmaceutical company that focuses on orphan drugs in the hematology, immunology and oncology sectors, was spun off by Deerfield, Illinois-based drug giant Baxter International Inc. last summer. In a press release, Baxalta stated that the current transaction with Shire will maintain the tax-free status of that spinoff—a crucial detail reported to be the tipping point in getting a deal done. Additionally, since Shire is based in Ireland, Baxalta will benefit from a lower tax rate post-pairing.
Ropes & Gray has taken the lead for Shire on its Baxalta buy, with a team led by M&A partner Christopher Comeau, securities and public companies partner Paul Kinsella, tax partners Christopher Leich and David Saltzman, executive compensation and employee benefits partner Jonathan Zorn, antitrust partner Michael McFalls, life sciences partner Albert Cacozza and associates Zachary Blume and Tara Fisher. Comeau was not immediately available for comment Monday.
Slaughter and May is serving as U.K. counsel to Shire on the deal, while also handling antitrust matters outside the U.S. Corporate partners Martin Hattrell and Adam Eastell, finance partners Matthew Tobin and Azadeh Nassiri, tax partner Tony Beare and antitrust partner Claire Jeffs are leading the team from the Magic Circle firm, along with associates Mace Gorringe, Harry Hecht, Charles Osborne, Elena Prattent, Hector Sants, Andy Williams and Tina Zhuo. The Magic Circle firm teamed up with Ropes & Gray late last year to advise Shire on its $5.9 billion buy of biotechnology company Dyax Corp. (At the time, Shire said it was still interested in a deal for Baxalta.)
Cravath, Swaine & Moore is serving as tax counsel to Shire through partners Stephen Gordon and Lauren Angelilli, of counsel Michael Schler and Kara Mungovan and Arvind Ravichandran. Last year Shire hired Bill Mordan as its new general counsel, as noted by sibling publication Corporate Counsel.
Taking the lead for Baxalta on its proposed sale to Shire are Kirkland & Ellis corporate partners Scott Falk, Daniel Wolf and Michael Brueck, as well as tax partners Dean Shulman, Mike Carew and Benjamin Schreiner. Kirkland declined to comment further on the transaction. Jones Day is providing global antitrust counsel to Baxalta through partners Michael Bennett, Pamela Taylor and Johannes Zöttl. (The Am Law Daily reported last week on the retirement of veteran Jones Day antitrust partner Joe Sims.)
Baxalta, whose general counsel is Peter Edwards, expects its sale to Shire to close by midyear. Baxalta itself was created less than a year ago when Baxter International—advised by Faegre Baker Daniels—retained a 19.5 percent stake in the company after spinning it off. Skadden, Arps, Slate, Meagher & Flom M&A partners Charles Mulaney Jr. and Gary Cullen, corporate finance partner David Goldschmidt, tax partner Steven Matays and M&A counsel Joseph Miron are now advising Baxter on the sale of its former subsidiary to Shire.
U.S. Senate lobbying records show that Baxalta retained Brownstein Hyatt Farber Schreck, Foley Hoag and Manatt, Phelps & Phillips after the company was spun off by Baxter and received Shire’s initial takeover bid. The three Am Law 200 firms have been lobbying for Baxalta on Medicare coverage for certain drugs, as well as tax, trade and other matters. Through the third quarter of last year, Baxalta had paid $40,000 to Brownstein Hyatt and $60,000 to Foley Hoag, but no payments have yet been listed for Manatt Phelps.
Lobbying records also indicate that Shire has paid $5,000 to King & Spalding since hiring the firm last October to advise on biotechnology coverage issues. Williams & Jensen, a Washington, D.C.-based law and lobbying firm, received another $180,000 from Shire through the first three quarters of 2015 for tax-related work.
Shire has remained active in the acquisition space after it saw its own proposed $54 billion takeover by Chicago-based biotechnology research company AbbVie Inc. fall apart in late 2014 amid increased scrutiny by the U.S. Department of the Treasury into corporate tax inversions.
In August 2015, Shire scooped up New York-based Foresight Biotherapeutics Inc.—which makes a drug to treat pinkeye—for $300 million in cash. Davis Polk & Wardwell advised Shire on that transaction, while Morgan Lewis & Bockius represented Foresight.