Shire offloads oncology business to French firm for 2.4 billion US dollars

Pharmaceutical giant Shire has agreed to sell its oncology business to French firm Servier for 2.4 billion US dollars (£1.68 billion), ahead of a potential takeover offer by Japan's Takeda.

The drug-maker's board has given the green light to the deal, which does not require shareholder approval and is now expected to close in the second or third quarter of 2018.

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.

Shire said it was considering returning proceeds of the sale to investors through a share buyback programme after the current offer period - during which Takeda could launch a formal bid - expires.

Shire chief executive Flemming Ornskov said: "This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio.

"While the oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy.

"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.

"We are confident that Servier will continue to invest in this business and our colleagues who are expected to transfer as part of the transaction in order to meet the needs of cancer patients globally."

Shire shares rose as much as 1.8% on the back of the news.

The company's stock price surged last month after Osaka-based Takeda said it was considering making a takeover approach for the £32.8 billion valued firm.

According to UK takeover rules, Takeda must now either make an offer for Shire or walk away by April 25.