On Monday, AstraZeneca’s shares fell by up to 7% following reports that the company had talked about a possible mega-merger with Bristol Myers Squibb.
If the two companies merge, they would form the world’s fourth-largest drugmaker by market capitalization and the largest by revenue, uniting a leading European pharmaceutical company with a major U.S. competitor.
Analysts noted that such a deal would be an unexpected strategic move for one of the pharmaceutical industry’s leading growth stories.
Although details of the talks are limited, analysts questioned why AstraZeneca, whose market value has increased under CEO Pascal Soriot because of a strong drug pipeline, would pursue such a transaction.
“The only advantage for AstraZeneca in this rumoured combination with BMS seems to be to accelerate its U.S. footprint and sales,” said Lucy Coutts, investment director at JM Finn, an AstraZeneca shareholder. “On balance, BMS shareholders would be the winners of any combination with AZN and so this news will undoubtedly be received coolly by AZN shareholders,” she added.
Shares of Bristol Myers rose 6% in premarket trading following the report.
By CEO NA Editorial Staff
