AstraZeneca in talks to buy Bristol Myers Squibb

The British pharmaceutical group AstraZeneca is in talks to buy its American competitor Bristol Myers Squibb. The deal would be worth around 400 billion dollars and would be the largest merger ever completed in the sector.

The resulting entity would become the world's fourth-largest pharmaceutical group by market capitalisation. AstraZeneca is currently worth some 196 billion pounds, equivalent to 264 billion dollars, while Bristol Myers Squibb stands at 133 billion.

Reactions and obstacles

The market received the news coolly. AstraZeneca's share lost 7% after the announcement, a sign of a sceptical rather than enthusiastic stance among investors.

The deal is driven by chief executive Pascal Soriot and would significantly widen the group's presence in the United States. The current US administration favours consolidation of this kind.

Two sets of obstacles nonetheless remain. The first is political and concerns London. British authorities could intervene to prevent the headquarters moving to the United States, as happened in 2014 when Pfizer attempted to acquire AstraZeneca.

The second is a competition matter. Antitrust authorities could block the deal or require substantial changes, particularly given the positions the combined group would reach in cancer treatments.

The negotiations are at an early stage. They may therefore be delayed or break down entirely, and none of the final terms has been settled.

A deal of this size would redraw the sector's global ranking and the distribution of research activity between Europe and the United States. These are decisions measured over years, well beyond the immediate reaction of the markets.