Astrazeneca explores $400bn megadeal with US rival
Astrazeneca is exploring a $400bn (£300bn) merger with US rival Bristol Myers Squibb, in a deal that would create one of the world’s largest pharmaceutical groups.
The FTSE 100 giant has held talks with the US group in recent months about a possible tie-up, according to reports in the Financial Times.
Talks could lead to a deal in the near future, but also risk being delayed or falling apart, people familiar with the matter told the newspaper.
Any potential transaction would likely consist of a combination of both cash and shares, the people said.
Astrazeneca, the UK’s second most valuable listed company behind only HSBC, has a market valuation of £196bn. New York listed Bristol Myers Squibb has a market value of roughly $133bn (£98.6bn).
Astrazeneca’s share price declined 7.1 per cent in early trading to 11,726p per share.
The group’s share price has risen 13.4 per cent in the twelve months, while Bristol Myers Squibb has increased 43.8 per cent.
Astra pivots away from the UK
The deal has also triggered questions over Astrazeneca’s ties to the UK, as its chief executive Sir Pascal Soriot pushes ahead with a pivot towards North America, previously describing Astrazeneca as a “very American company”.
Last September, the drugmaker upgraded its listing on the New York stock exchange, allowing US investors to buy it directly. The elevation put its US listing on par with that of London, which was viewed as a blow to the struggling UK market.
The group went on to strike a $50bn deal with Donald Trump’s administration to invest in US manufacturing and transatlantic research facilities. The company currently operates 23 sites across 11 states, ranging from research and development to manufacturing.
But Britain’s biggest drugmaker has insisted that it intends to remain based in Cambridge and retain its London listing.
It promised to plough £300m into its UK operations in April, just months after cancelling investments into a new lab in Cambridge and a site in Macclesfield.