The deal — assuming it wins the backing of shareholders — will be the largest overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.
The tie-up is one of the largest ever in the pharmaceuticals sector, crowning a hectic few months of deal-making as big drugmakers look to improve their pipelines by bringing in promising medicines developed by younger companies.
The enlarged group will be a leader in treatments in gastroenterology, neuroscience, oncology, rare diseases, and blood-derived therapies, used for serious conditions such as hemophilia.
The agreement came on the last day for Takeda to make a firm bid. Shire had rejected four previous offers, due to price concerns and the fact that the Japanese company is proposing to pay for much of the acquisition in stock.
The final deal is approximately 46 percent cash and 54 percent stock, leaving Shire shareholders owning around half of the combined group.
Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda American depositary shares for each share, the companies said, valuing the offer at 48.17 pounds a share based on the latest price and exchange rate.
Shire's shares, which had been trading about 10 pounds below the value of Takeda's offer, traded 4 percent higher at just over 40 pounds, still well under the agreed price and indicating that shareholders still have reservations.
Jefferies analysts said they expected the shares to trade at a relatively wide discount to the offer, given the large stock component and the fact that the deal is not expected to close until the first half of 2019.
Although the deal must get the support of 75 percent of Shire's voting shareholders, some of whom do not want to hold Takeda paper, Weber told reporters he believed investors would back the transaction.
"Their board and our board is confident that both shareholders will see the benefit of the acquisition," he said.