Buying Europe and emerging markets wholesale: the Nycomed acquisition (2011)

A milestone in growth by acquisition

The core of the Nycomed deal was that Takeda covered the sales it was losing to patent expiry not by building over several years of its own effort, but by buying a finished distribution network for more than $12.5B (¥1tn). Hasegawa overrode the caution of the board and added borrowing to what had been an essentially debt-free balance sheet, in order to spread the business into the emerging markets and Europe at a stroke. The number of countries Takeda operated in went from 28 to more than 70, and the original aim — shoring up a weak point — was indeed achieved.

Yet widening the business base and raising corporate value did not necessarily coincide. The trillion-yen-plus of capital deployed left behind a large load of goodwill and debt, which came back as later impairments, the burden of restructuring, and the country risk of Russia. Even so, the acquisition cemented in Takeda the “buy time” management begun with Millennium in 2008, and became a milestone on the road to the roughly $62 billion Shire acquisition of 2019. How to grow a bought-in, widened business into value worthy of the capital deployed — the question Nycomed posed still stands before today’s Takeda.