AstraZeneca Faces Fresh Pressure As $400B Bristol Myers Deal Talks Reportedly Persist

The merger talks between the two companies remain active, Semafor reported.

• As per the report, a possible combination could set the stage for a full New York relisting of AstraZeneca. 
• The deal talks were first reported over the weekend.
• NYSE-listed shares of AstraZeneca have fallen 8% this week following the report, while BMY gained 1%.

AstraZeneca’s (AZN) merger talks with Bristol-Myers Squibb (BMY) reportedly remain active, though it would require the former to make hard commitments on investments within the U.S., Semafor reported on Tuesday.

While BMY shares edged up 1% at the time of writing, NYSE-listed shares of AZN fell 1%.

Talks Still Live Despite Risks

A possible combination would shift even more of AstraZeneca’s revenues away from the U.K. and Europe and could set the stage for a full New York relisting of the company, according to Semafor.

Any U.S. regulatory review would almost certainly demand firm commitments on research spending, manufacturing, and jobs, the report added, noting that it would pull the company further from its home ground in Britain.

How The $400B Talks Began

The deal talks were first reported over the weekend. The Financial Times reported that discussions have been underway for several months between the two drugmakers and could produce a deal soon—or collapse. A tie-up would create a group valued at nearly $400 billion, the world’s fourth-largest drugmaker by market capitalization, the report noted.

AstraZeneca had a market capitalization of about $240 billion at the time of writing, compared with around $135 billion for Bristol Myers Squibb. Neither AstraZeneca nor Bristol Myers Squibb has confirmed the deal talks, which are expected to involve a combination of shares and cash.

FT noted over the weekend that antitrust scrutiny would be intense because both companies have large overlapping oncology portfolios, notably Bristol Myers’ Opdivo and AstraZeneca’s Imfinzi. Political questions on both sides of the Atlantic, including the possibility of AstraZeneca redomiciling in the U.S., would also arise, it added.

NYSE-listed shares of AstraZeneca have fallen 8% this week following the report, while BMY gained 1%.

How Did Retail Traders React?

On Stocktwits, retail sentiment around AZN and BMY stocks stayed within the ‘extremely bullish’ territory over the past 24 hours, while message volume remained at ‘extremely high’ levels.

A Stocktwits user said a merger is insignificant for Bristol Myers.

Another user opined that AZN stock is under pressure from multiple problems, while adding that the stock is not worth buying right now.

While AZN stock has fallen 11% year to date, BMY has gained 23%. 

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