Shares of AstraZeneca tumbled as much as 9% after reports emerged that the British pharmaceutical giant has held merger discussions with US rival Bristol Myers Squibb over a deal that could create a combined company worth close to $400 billion. If completed, the transaction would rank among the largest mergers in corporate history and would create the world’s largest pharmaceutical company by revenue.
Neither company has confirmed the talks publicly. AstraZeneca declined to comment when approached, while Bristol Myers Squibb did not immediately respond outside normal business hours. Coming into the reports, AstraZeneca carried a market value of roughly $264 billion, compared with about $133 billion for Bristol Myers Squibb.
The market reaction was notably lopsided. While AstraZeneca investors punished the stock, Bristol Myers Squibb shares were comparatively little changed, reflecting a widespread view among analysts that the deal makes more strategic sense for the smaller, US-based company than for AstraZeneca, which has built a reputation as one of the pharmaceutical industry’s stronger growth stories under its long-serving chief executive.
Several analysts described themselves as puzzled by both the substance and the timing of the talks, noting that AstraZeneca has repeatedly said in the past that it does not need large-scale acquisitions to hit its ambitious sales targets. Portfolio managers who hold the stock echoed that skepticism, arguing that folding in a company facing looming patent expirations could disrupt a well-run pipeline rather than strengthen it.
Bristol Myers Squibb, for its part, is contending with the loss of patent exclusivity on some of its top-selling drugs later in the decade, a dynamic that has weighed on its growth outlook and made it a natural candidate to seek a larger partner. Analysts have pointed to past mega-mergers in the sector as rough guides for how a deal might be valued, though significant regulatory hurdles would likely accompany any formal transaction given the scale of both companies’ oncology franchises.
For now, the situation remains fluid, with people familiar with the discussions cautioning that talks could still fall apart before any formal announcement is made.