LONDON, April 16 (Reuters) - Shire, the London-listed rare diseases specialist that is a potential takeover target for Japan's Takeda Pharmaceutical, is selling its oncology business to unlisted French drugmaker Servier for $2.4 billion.
The deal works for Servier, which has been trying to build its presence in the oncology market for the last few years, by giving an immediate presence in the US.
Under the terms of the agreement, Servier has agreed to acquire Shire's oncology business for a total consideration of $2.4 billion, in cash, upon completion.
The firm, which has its headquarters in Dublin, started looking at offloading the oncology business in December, and said the process considered "multiple potential strategic buyers" across Europe, Japan and the US.
"The proceeds from the transaction increase optionality and Shire's Board will consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback after the current offer period regarding Takeda's possible offer for Shire concludes".
But the move also means Shire becomes less attractive to Takeda, which has until 25 April to formally announce a takeover bid under United Kingdom stock market rules, after expressing an interest earlier this month.
"We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets".
Still, given the small contribution of the cancer business to Shire's overall profits, Deutsche Bank analysts said this was unlikely to be a deal breaker.
Flemming Ornskov, Shire's CEO, suggested that other sell-offs might be possible after buying spree that culminated in the 2016 acquisition of Baxalta for $32 billion. The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under FDA review for the treatment of ALL, and early stage immuno-oncology pipeline collaborations.
Olivier Laureau, the group president of Servier, said the deal will enable the company to become a key global player in oncology.