A rumored megamerger between pharmaceutical giants AstraZeneca and Bristol Myers Squibb is facing backlash on Wall Street — confusing analysts and spurring a significant stock sell-off.
According to people “familiar with the matter,” The Financial Times reported on Sunday that AstraZeneca and Bristol Myers have discussed a tie-up in recent months; and, though a deal could soon solidify, it may also break down or be delayed. Reuters later echoed some of these details, citing a person familiar with the situation who said the companies had held initial talks about a possible combination.
The market reaction indicates investors aren’t keen to see this deal materialize. Bristol Myers shares were down almost 1.5% at one point early Monday, while AstraZeneca’s fell more than 8%, wiping out roughly $22 billion from the U.K.-based company’s market value. AstraZeneca completed a direct listing on the New York Stock Exchange early this year, though its primary listing is still on the London Stock Exchange.
If the deal were to happen, it would be one of the pharmaceutical industry’s largest, creating a combined entity worth nearly $400 billion. It would also supercharge AstraZeneca’s two biggest product categories, cancer and cardiovascular drugs, which last year respectively accounted for 44% and 22% of the company’s $59 billion in revenue.
