Takeda president Yasuchika Hasegawa said that following its acquisition of Nycomed, the drugmaker has no near-term plans for another large-scale merger and acquisition, The Wall Street Journal reported Friday. "We would like to focus on integration for the next year or two. We don't have the capacity for big acquisitions, but maybe small ones," he indicated.

Hasegawa noted that the company has no interest in seeking additional infrastructure in the "crowded Japanese pharmaceutical sector" because domestic M&A integration can often be even more complicated and sensitive than overseas deals. "The process is very time-consuming and frustrating. It's not worth it," he remarked.

However, he noted that the recently enacted US-South Korea free-trade deal represents "a threat," and suggested that foreign acquisition is one strategy to compete against rivals such as South Korea. "Unless we go back to a moderate growth trajectory, the strong yen problem will not go away," Hasegawa said, adding the country needs to shift from long-running deflation to moderate inflation, as well as transition to offshore manufacturing to combat the low-cost challenge posed by China and Southeast Asia.

He noted that "by doing M&As, we can mitigate our disadvantages." Specifically, he said that the government's recent yen package, which includes a special credit line for overseas acquisitions and purchases of energy-related assets, will help Japanese firms pursue this M&A path. However, he warned that "Japan has a shortfall in management that can execute post-acquisition restructuring."

source:Takeda