[HONG KONG] Takeda Pharmaceutical Co is nearing an agreement to buy rival drugmaker Shire Plc, people familiar with the matter said, in what would mark the biggest ever takeover by the Japanese company.

A deal agreement could be announced as early as Tuesday, the deadline set by UK regulators for Takeda to make a firm offer for Shire, according to the people, who asked not to be identified because the information is private.

Recent negotiations have centered on the structure of the potential transaction, with Shire seeking an increase in the cash component of Takeda's £46 billion (S$83.2 billion) bid, the people said. It wasn't immediately clear if Takeda had consented to the request.

Takeda reached a preliminary pact with Shire last month after offering the equivalent of about €49 a share, including £27.26  in stock and £21.75  in cash. That's a 60 per cent premium to Shire's closing price on March 27, before Takeda disclosed its takeover interest.

Negotiations are ongoing, and an agreement could still be delayed, the people said. Takeda has also held preliminary talks with potential advisers about divestitures it may pursue if the Shire takeover is successful, according to the people.

Representatives for Takeda and Shire declined to comment.

Chief Executive Officer Christophe Weber is steering Takeda into its largest-ever transaction to replenish the drugmaker's pipeline of medicines with promising treatments for rare diseases such as hemophilia - a field that's lured many pharmaceutical companies lately because they can charge more for unique life-saving drugs than for routine treatments.

Takeda could face a multiple-step credit downgrade due to a "spike in leverage" if its proposed acquisition of Shire goes ahead, Moody's Investors Service said last month.

BLOOMBERG