AstraZeneca-Bristol Myers merger talks reported at nearly $400bn value

AstraZeneca Bristol Myers merger discussions have taken place in recent months, according to a Financial Times report cited by Reuters and CNBC. The companies have not announced a transaction, and the reported combination would create a pharmaceutical group valued at nearly $400 billion, rather than establish a confirmed purchase price.

Reuters reported on August 2 that AstraZeneca had been exploring a combination with its US rival, citing people familiar with the matter. The report said an agreement could emerge soon, be postponed or fail to proceed.

AstraZeneca declined to comment when contacted by Reuters. Bristol Myers Squibb did not immediately respond to Reuters outside regular business hours. Reuters said it could not immediately verify the Financial Times report. CNBC separately reported that neither company immediately responded to its request for comment.

Is AstraZeneca merging with Bristol Myers Squibb?

No merger has been confirmed. The reported $400 billion figure is an estimate of the value of a combined company, according to the Financial Times accounts carried by Reuters and CNBC. The available reports do not set out a price, financing plan, formal board approvals, a signed agreement or a timetable for completion.

Were the companies to combine, the resulting group would rank among the world’s largest drugmakers by value, based on the reported estimate. That outcome remains contingent on talks producing an agreement, which the reports say is uncertain.

AstraZeneca’s drug portfolio provides some context for the scale of the reported discussions. Reuters and CNBC said cancer medicines generated about $25 billion of the company’s 2025 sales, close to half of its total. Medicines in cardiovascular, renal and metabolism generated about $12 billion, according to those reports.

The companies also have a prior commercial relationship that is separate from the newly reported corporate-combination talks. AstraZeneca and Bristol Myers worked together in diabetes under an alliance that began in the 2000s and expanded after Bristol Myers acquired Amylin Pharmaceuticals in 2012.

In December 2013, AstraZeneca announced an agreement to buy Bristol Myers’ interests in that diabetes alliance for $2.7 billion at completion, plus up to $1.4 billion tied to regulatory, launch and sales milestones. AstraZeneca also agreed to sales-related royalties through 2025 and possible payments of up to $225 million when certain assets were transferred.

That transaction concerned the diabetes business, including rights to develop, manufacture and commercialise the portfolio. It does not constitute evidence that the companies will reach an agreement on the broader merger now reported.

AstraZeneca had also outlined plans last year for a direct US listing while retaining its London listing, Reuters and CNBC reported. For now, the market significance of the reported talks rests on a potential consolidation of two major pharmaceutical groups, with no public confirmation from either company that negotiations will result in a deal.

This story draws on original reporting from CNBC.