AstraZeneca is reported to have held talks with US rival Bristol Myers Squibb over a merger that would create a drugs giant worth more than £300billion.
The Financial Times says the Cambridge-headquartered pharmaceutical company has discussed the opportunity with New York-listed Bristol Myers Squibb (BMS) in recent months.
Pascal Soriot, CEO of AstraZeneca. Picture: AstraZeneca
If it proceeded, the move would be one of the industry’s largest ever deals and create the world’s fourth largest pharmaceutical company. Reports indicated that a deal could develop further in the near future but “may be delayed or fall apart”, according to sources.
AstraZeneca declined to comment. BMS has been contacted for comment.
AstraZeneca, which built its £1billion flagship R&D site The Discovery Centre (DISC) at Cambridge Biomedical Campus, is the UK’s second most valuable company, with a market value of around £196billion.
Shares in the company fell by 6.1 per cent to 11,860p early on Monday.
BMS focuses on cardiovascular and oncology treatments and is currently worth around £133billion.
Any deal would be likely to face significant regulatory hurdles, amid significant scrutiny over the sector from competition and antitrust watchdogs.
A merger is likely to be assessed by antitrust authorities, who have sought to increase domestic investment under President Donald Trump’s leadership.
The Discovery Centre (DISC) is AstraZeneca’s flagship R&D site at Cambridge Biomedical Campus.
The reports come amid efforts from AstraZeneca to grow its foothold in the US under boss Sir Pascal Soriot.
The FTSE 100 firm completed a new additional listing on the New York Stock Exchange in June as a result, in a blow to the London markets.
Chris Beauchamp, chief market analyst at IG, said: “Companies saying one thing and doing another is a well-trodden path, and AstraZeneca joins in with the reports of a proposed alliance with Bristol Myers Squibb, having only said recently that it didn’t need M&A (mergers and acquisitions) to hit its targets.
“Though a rare example of a big UK firm buying a smaller US firm is something to warm the cockles of the British heart, it risks the departure of yet another national champion, and in any case the pair’s large cancer divisions is a major hurdle to a successful deal.”