Reshaping the global pharmaceutical landscape! AstraZeneca (AZN.US) plans to acquire Bristol-Myers Squibb (BMY.US), potentially creating the largest pharmaceutical merger in history

According to information obtained by Zhiyong Finance APP, sources have revealed that AstraZeneca (AZN.US) has initiated discussions regarding the acquisition of Bristol-Myers Squibb (BMY.US). If this mega deal were to go through, it would create one of the world's largest pharmaceutical companies.

The sources added that early-stage talks regarding a potential merger have taken place between the two companies, but they declined to be named as the matter is not yet public.

These individuals cautioned that it is currently unclear whether the negotiations are ongoing, or if they will materialize into an actual deal.

Bristol-Myers Squibb, with a market value of $133.4 billion, could provide AstraZeneca with a much larger foothold in the US market. AstraZeneca itself has a market value of around £195.9 billion ($264.4 billion).

AstraZeneca’s market value exceeds that of Bristol-Myers Squibb

Bristol-Myers Squibb is preparing for patents on some of its core products to expire, including the anticoagulant Eliquis and the cancer drug Opdivo. Together, these two products account for about half of the company’s sales revenue.

Last week, Bristol-Myers Squibb announced a quarterly sales record of $13 billion, the highest in its history. Growth was mainly driven by newer products—hematologic oncology therapy Breyanzi, skin cancer drug Opdualag, and heart disease medicine Camzyos.

Under CEO Pascal Soriot, AstraZeneca has become a major player in cancer treatments thanks to a series of blockbuster drugs. After Soriot took over as CEO in 2012, he fended off a takeover attempt from Pfizer, which prompted UK government intervention due to concerns over the loss of a key British company.

AstraZeneca is now the second-largest company by market capitalization on the London Stock Exchange. The company has been increasing its US presence—in the past year, it upgraded its US share listing from NASDAQ ADRs to the New York Stock Exchange, while retaining its headquarters and main listing in London.

The pharmaceutical firm is advancing towards an ambitious goal of $80 billion in sales by 2030 and aims to break into the highly lucrative weight loss market with several drugs in development.

Soriot previously told the media that when approached with projects outside the company's core areas, “I always say no, because once you step outside your expertise, the risk of making a bad bet rises rapidly.”

An analyst at Mizuho believes investors may oppose the idea of a merger because AstraZeneca's earnings per share are expected to grow by 10% or more annually over the next five years, while Bristol-Myers Squibb’s earnings per share could decline for the rest of the current decade.

“Investors will argue that AstraZeneca does not need Bristol-Myers Squibb; it's the other way around. Unless there’s massive deal synergy that offsets any revenue/earnings decline, this merger is hard to justify,” wrote Mizuho healthcare industry specialist Jared Holz in a report on Sunday.

However, Holz commented that his initial reaction was, “If there’s ever been a time in history suited for such a deal, it’s probably now,” citing the Trump administration’s relatively loose stance on merger activity as support.

If the deal goes through, it would rank among the largest pharmaceutical mergers in history, surpassing Bristol-Myers Squibb’s $74 billion acquisition of Celgene in 2019.