AstraZeneca Considers Acquiring BMS to Expand in U.S. Market... $400 Billion Mega Deal (Comprehensive)

AstraZeneca Anticipates Stronger U.S. Presence

Concerns Over BMS Patent Expirations and Slowing Performance

It has been reported that British pharmaceutical company AstraZeneca has considered acquiring its American rival, Bristol Myers Squibb (BMS). If the deal goes through, it would give rise to one of the world’s largest pharmaceutical firms, with a combined valuation of around $400 billion (approximately 577 trillion won).

According to the Financial Times (FT) and Bloomberg on August 2 (local time), AstraZeneca and BMS have held preliminary discussions regarding a potential merger and acquisition (M&A). While an agreement could be reached soon, FT reported that there is also a possibility the transaction could be delayed or fall through. Specific terms and the structure of the deal have not been disclosed.

AstraZeneca has a market capitalization of approximately 195.9 billion pounds (about 384 trillion won), while BMS is valued at about $133.4 billion (around 193 trillion won). Combined, the two companies would be worth close to $400 billion.

If the acquisition is completed, it is expected to become the largest transaction in the history of the pharmaceutical industry. According to Bloomberg data, the current largest acquisition in the sector was BMS’s purchase of Celgene in 2019 for $74 billion (about 107 trillion won).

Seeking to Expand Presence in the U.S. Market Through BMS

The reason AstraZeneca is looking into acquiring BMS is the potential to further strengthen its foothold in the U.S. market. While AstraZeneca is the second-largest company by market capitalization listed on the London Stock Exchange, FT reported that it has been increasing focus on a U.S.-centered strategy in recent times.

Last year, AstraZeneca moved its American Depositary Receipts (ADRs) from being traded on NASDAQ to the New York Stock Exchange (NYSE). The company’s headquarters and primary listing status remain in London.

BMS is currently facing the expiration of patents on its main pharmaceutical products. Patent protection for major offerings such as the blood thinner Eliquis and the cancer treatment Opdivo is about to end; together, these two drugs account for about half of BMS’s total sales.

Last week, BMS reported a record quarterly revenue of $13 billion. Growth was driven by new drugs such as Breyanzi for blood cancer, Opdualag for skin cancer, and Camzyos for heart disease.

AstraZeneca is aiming for $80 billion in revenue by 2030 and is developing various obesity treatments in an effort to enter the weight loss pharmaceutical market.

BMS Faces 'Patent Cliff' Challenges... Skepticism About the Merger Remains

However, there are also views in the market suggesting that AstraZeneca does not have a strong need to acquire BMS. Jared Holz, a healthcare expert at Mizuho, analyzed that while AstraZeneca’s earnings per share are expected to grow at an average annual rate of more than 10% over the next five years, BMS’s earnings per share may decline up until 2030.

Holz remarked that investors are likely to argue, “It is not that AstraZeneca needs BMS, but rather that BMS needs AstraZeneca,” adding that “without substantial synergies to offset declining sales and profits, this merger would be difficult to justify.”

He did note, however, that the Trump Administration is relatively favorable toward corporate mergers and acquisitions, commenting, “If there is ever a time to pursue such a deal, it could be now.”

Meanwhile, under the leadership of CEO Pascal Soriot, AstraZeneca has grown into a major cancer-focused pharmaceutical company. Shortly after Pascal Soriot took office in 2012, he blocked Pfizer’s attempt to acquire AstraZeneca, an event that even prompted intervention from the British government, concerned that one of the nation’s core companies could be taken over by a foreign entity.

This content was produced with the assistance of AI translation services.