Jeffrey Goldfarb and Rob Cyran explain why there should be deeper, more lasting benefits from the pricey $55 bln acquisition of Shire than just tax and cost savings.
And today finally pushed to two trillion dollars today 7% up from Lester and kicked by a deal activity US pharmaceutical company buying -- for 55 billion dollars. It would try -- their fifth offer. It finally come through. Yet as usual when there's five rounds of offering. You can guess they've paid a pretty hefty price that -- 53% premium which is really really big. And the obvious you look at this in this synergies they're like well we don't really -- talk about them probably because there are things the right auto overlapped -- white it it's doing it for tax reasons it's the they know that if they move they -- the company UK have a reason versions we've heard so much about is the biggest one so far where US company. By as the overseas company lowers its -- it but in fact in this deal. There's enough synergies really there may not be -- well I think is that tax that our tax benefits however we've we've become -- -- you've heard lawmakers. Nickel he sounds about how they're gonna they're gonna reform the tax code we hear Obama administration pushing on it then perhaps make any abandon versions for attractive. And the things if if there's tax reform. Probably you know why would they've done these these deals because then suddenly the US will tax. Companies that that would target when you would have run away to lower your taxes which all of a sudden turned out to be the same back home exactly seemingly paid 50% premium but it. Not what you actually say audience this actually has good old fashioned evident they're buying. And other relevant and -- is quite with Abby is about. A majority of their sales come from one drug. That's a really dangerous position to be in because you know if there's a problem with the drug since it to cut sales and then and then -- disaster but -- has a really good business but they still what's called -- -- for orphan indications -- -- Diseases which most people haven't heard of or very few people have is a growing part of them are really that's -- rare disease it was really fast growing business because what they've does -- change the laws to basically people you can. Charge a lot for these diseases. And because further our drugs for them to access for the LAX 300000 dollars a year per page. But the thing is these drugs no extending your restrictions in the past for the most part. That means that it's actually kind of easy. To develop treatment for these diseases. And they actually make a difference for these people folic you know it -- year. Make a heart disease it's it's slightly better than short tons of treatments is that they haven't extending life and -- and it's actually making huge difference for these patients and so it's hard for insurance companies governments argue that they shouldn't Haiti's Ritson. Prices. And by -- getting into this they've actually got their arm into one of the best bring business departments publicly growing faster than average for a long time to come. They came for the tax reasons but -- probably and that you know what company backstage for the -- of -- saying that drugs are terrible it will keep an eye on how that plays out. And we'll be back with more Britain used next week.