AstraZeneca, Bristol Myers Squibb in talks on $400 billion merger

AstraZeneca shares fell 7 percent to 11,723p on talks to buy Bristol Myers Squibb in a deal worth nearly $400 billion.

The companies have held multiple rounds of contact over the past few months, though negotiations remain uncertain and could be delayed or collapse, according to a Financial Times report. No deal structure has been set; the final proposal could combine cash and stock.

AstraZeneca carries a market value of about £196 billion ($264 billion), while Bristol Myers Squibb is worth roughly $133 billion, putting the combined entity near $400 billion and fourth among global drugmakers. The transaction would dwarf AstraZeneca's record $39 billion purchase of Alexion in 2021 and Bristol Myers Squibb's $74 billion acquisition of Celgene in 2019.

For AstraZeneca, the deal would expand its US research, sales, and commercialization reach — the US contributes nearly half of its revenue and is central to its $80 billion 2030 target, up from $58.7 billion last year. Bristol Myers Squibb faces patent expirations on core drugs Eliquis and Opdivo in coming years and would gain access to AstraZeneca's pipeline.

Oncology overlap could draw regulatory scrutiny. Cancer drugs generate nearly half of AstraZeneca's sales and more than 40 percent of Bristol Myers Squibb's revenue, with Opdivo and AstraZeneca's Imfinzi competing directly in non-small cell lung cancer. Regulators are likely to examine existing product overlap, late-stage pipelines, and pricing impact, potentially forcing divestitures. The US Federal Trade Commission, UK Competition and Markets Authority, and European Commission would all review the deal.

The talks have renewed UK concerns over the "Americanization" of its leading companies. AstraZeneca completed a direct New York listing in June, widely read as a step to deepen its US capital markets presence. In 2014, AstraZeneca rejected a nearly £70 billion ($94.3 billion) takeover approach from Pfizer, with CEO Pascal Soriot leading the defense; the shares have more than quadrupled since.

Bristol Myers Squibb has pursued acquisitions to counter its patent cliff, with GAAP research spending falling about 11 percent to roughly $10 billion in 2025. Its oncology and immunology partnerships with BioNTech and Hengrui Pharma have supported a 47.7 percent share gain over the past year. AstraZeneca reported Q2 EPS of $2.63 against a $2.48 estimate on revenue of $15.38 billion on July 27, while Bristol Myers Squibb posted EPS of $2.04 versus $1.61 consensus on revenue of $12.97 billion.

The deal would reshape the global pharma sector, combining two of the largest oncology franchises. Investors will watch for any announcement ahead of Bristol Myers Squibb's Q3 results on Oct. 29 and AstraZeneca's on Oct. 30, with Monday's open offering the first read on how markets price the odds.

This article is for informational purposes only and does not constitute investment advice.