Integration and Acquisition Costs

For the three months ended March 31, 2018, Shire recorded Integration and acquisition costs of $239.7 million, primarily due to the acquisition and integration of Baxalta Inc. (Baxalta), which was acquired in June 2016.

The Company continues its activities to integrate Baxalta. The costs associated with integration are primarily related to headcount reduction and facility consolidation related to its Rare Disease segment. The Company also drove savings through the continued re-prioritization of its research and development programs and consolidation of its commercial operations. The integration of Baxalta is estimated to be completed by mid to late 2019.

The Baxalta integration and acquisition costs include $137.5 million of asset impairments, $21.9 million of third-party professional fees, $11.7 million of expenses associated with facility consolidations, and $5.8 million of employee severance and acceleration of stock compensation for the three months ended March 31, 2018. The Company expects the majority of these expenses, except for certain costs related to facility consolidations, to be paid within 12 months from the date the related expenses were incurred.

The following table summarizes reserve for the integration costs for certain types of activity during the three months ended March 31, 2018:



(In millions)	Severance and employee benefits			Lease terminations			Total
As of January 1,	$	72.9		$	56.6		$	129.5
Amount charged to integration costs	5.0			3.5			8.5
Paid/utilized	(35.1		)	(2.5		)	(37.6		)
As of March 31,	$	42.8		$	57.6		$	100.4

For the three months ended March 31, 2017, Shire recorded integration and acquisition costs of $116.0 million, primarily related to the acquisition and integration of Baxalta. These costs include $36.9 million of employee severance and acceleration of stock compensation, $35.2 million of third-party professional fees, and $24.5 million of expenses associated with facility consolidations.