- AstraZeneca is reported to be in talks with US cancer-drug developer Bristol Myers Squibb over a $400bn merger.
- AstraZeneca’s shares plunged more than 7% to a low of £116.46 in early trading in London, as investors reacted to news of the talks.
- Analysts are left ‘perplexed’ by the reports, questioning the rationale behind a potential tie-up.
- Bristol Myers Squibb’s shares jumped 8% in pre-market trading in New York following the news.
- AstraZeneca is the second-biggest listed company in the UK, with a market value of nearly £196bn before the news broke.
- Bristol Myers Squibb is worth $133bn and has struggled since 2023, facing declining growth due to multiple patent expiries.
- Analysts noted that a merger could create the world’s fourth-largest drugmaker by market value.
- John Murphy, a senior pharma analyst, stated that a deal made limited strategic sense for AstraZeneca due to differing growth outlooks.
AstraZeneca is reportedly in discussions to merge with Bristol Myers Squibb in a deal potentially valued at $400 billion, which would create the world's fourth-largest drugmaker. The news has led to a significant drop in AstraZeneca's shares, which fell over 7% in early trading, while Bristol Myers' shares rose by 8% in pre-market trading.1278
Analysts are perplexed by the merger talks, questioning the strategic rationale behind the deal. Jefferies analysts noted, “Given the strength of AZ's growth and innovation profile, we are a bit perplexed.” They highlighted that AstraZeneca is targeting $80 billion in sales by 2030, up from $58.7 billion last year, while Bristol Myers faces declining growth due to multiple patent expiries.459
The merger would create a combined oncology portfolio that could attract regulatory scrutiny due to the overlap in cancer treatments. John Murphy, a senior pharma analyst, stated that a deal makes “limited strategic sense” for AstraZeneca, given the differing growth outlooks of the two companies. AstraZeneca's market cap stands at $264 billion, while Bristol Myers is valued at $133 billion.10
Despite the potential benefits of a larger oncology powerhouse, analysts warn that such mega-mergers often hamper pipeline progress. The uncertainty surrounding the deal's completion adds to the complexity, as neither company has confirmed the discussions.
“Bristol Myers shares jumped 8% in pre-market trading, while AstraZeneca’s market value was nearly £196bn before the news. A deal would face close regulatory scrutiny because of the overlap in the companies’ oncology portfolios; if completed, it would create the world’s fourth-largest drugmaker by market value.”
The Guardian
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