AstraZeneca-Bristol Myers merger talks reported, with no deal announced
Reported talks could create a pharmaceutical group valued near $400 billion, but neither company has confirmed an agreement.
By Maya Okafor · Markets Writer
· 2 min read
An AstraZeneca Bristol Myers merger remains a reported possibility, not an announced transaction. Reuters and CNBC, citing the Financial Times, reported Aug. 2 that the drugmakers have held discussions in recent months about combining, potentially creating a pharmaceutical group valued at nearly $400 billion.
For investors, the central detail is the status: the reporting describes talks, with no public agreement or final terms. Reuters said a deal could emerge soon, but could also be delayed or fall apart. No consideration, financing, exchange ratio or other final terms have been publicly confirmed.
AstraZeneca declined to comment to Reuters. Bristol Myers Squibb did not immediately respond to Reuters outside regular business hours. CNBC separately reported that neither company immediately responded to its requests for comment.
Is AstraZeneca buying Bristol Myers Squibb for $400 billion?
No purchase price has been reported. The nearly $400 billion figure refers to the potential value of a combined company, according to Reuters’ account of the Financial Times report. That differs from the amount one company would pay shareholders to acquire the other.
A company’s value can refer to the market’s assessment of its equity, which is often called market capitalization. The reported figure should not be read as a disclosed price tag for Bristol Myers or a completed transaction.
Reuters said it could not independently verify the Financial Times report. CNBC described the potential combination as one of the largest mergers in history if it were completed, but the companies have not confirmed that they have reached a deal.
The companies have worked together before
AstraZeneca and Bristol Myers have a prior business relationship in diabetes treatments. In 2007, AstraZeneca agreed to pay Bristol Myers $100 million upfront and up to $950 million in potential milestone payments to partner on saxagliptin and dapagliflozin, Fierce Biotech reported. AstraZeneca was also to cover 75% of development costs, while global sales and revenue were to be shared.
The partnership later expanded around Bristol Myers’ 2012 acquisition of Amylin Pharmaceuticals. Bristol Myers said at the time that AstraZeneca would pay about $3.4 billion in cash to Amylin after that acquisition closed, and that the companies would share profits and losses from the collaboration equally.
That alliance did not remain jointly owned. In December 2013, AstraZeneca announced an agreement to acquire Bristol Myers’ interests in the diabetes business for $2.7 billion at completion, plus up to $1.4 billion tied to regulatory, launch and sales milestones, alongside royalty payments through 2025.
The reported merger discussions would therefore represent a possible corporate combination between companies that have previously collaborated and later separated parts of that partnership. For now, the reporting establishes only that talks have taken place.
This story draws on original reporting from CNBC.
