Pharmaceutical giant AstraZeneca and US-based Bristol Myers Squibb have discussed a tie-up that would create a company worth more than £300 billion, according to the Financial Times.
The newspaper reported that the companies have held talks in recent months. A deal could move forward in the near future but may be delayed or fall apart, it said, citing sources.
AstraZeneca declined to comment. Bristol Myers Squibb has been contacted for comment.
Scale of the potential deal
A merger would be one of the industry’s largest ever deals and create the world’s fourth largest pharmaceutical company. Cambridge-based AstraZeneca is the UK’s second most valuable company, with a market value of about £196bn. New York-listed Bristol Myers Squibb, which focuses on cardiovascular and oncology treatments, is worth about £133bn.
Regulatory hurdles
Any combination would likely face significant regulatory hurdles, with competition and antitrust watchdogs already scrutinising the sector. The deal would probably be assessed by the Trump administration’s antitrust authorities, which have sought to increase domestic investment under President Donald Trump.
The talks come as AstraZeneca attempts to expand its presence in the US under boss Pascal Soriot. The FTSE 100 firm completed a new additional listing on the New York Stock Exchange in June, a step seen as a blow to London markets.
Analyst reaction
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.”
