Drugmaker Bristol-Myers Squibb is betting big on cancer drugs after agreeing to buy Celgene in a $74 billion cash and stock deal. The transaction brings together a biotechnology giant and a massive pharmaceutical company, making it one of the largest mergers in the history of the U.S. pharmaceutical industry.
The transaction brings together a biotechnology giant and a massive pharmaceutical company, making it one of the largest mergers in the history of the U.S. pharmaceutical industry.
Under the terms of the deal, shareholders of Celgene will receive one Bristol-Myers Squibb share as well as $50 in cash for each share held. That values Celgene at $102.43 per share, a 54% premium to the closing price on January 2, 2018.
Celgene shareholders will also have rights to shares that will pay out later once the companies achieve certain regulatory milestones. Bristol-Myers Squibb will also assume Celgene’s $18 billion net debt that is based on the latest filings with U.S. Securities & Exchange Commission.
“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” said Giovanni Caforio, M.D., Chairman and Chief Executive Officer of Bristol-Myers Squibb. “As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation.”
The deal has won the approval of boards of both companies but is still subject to shareholder and regulatory approvals, as well as customary closing conditions. The companies expect to close the deal in the third quarter of 2019, according to a statement released on Thursday morning.
“For more than 30 years, Celgene’s commitment to leading innovation has allowed us to deliver life-changing treatments to patients in areas of high unmet need. Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company,” said Mark Alles, Chairman and Chief Executive Officer of Celgene.
Shares of Celgene were up 16.86, 25.30% to $83.50 at 11:30 a.m. in New York. Bristol-Myers Squibb shares, on the other hand, dropped $6.74, or 12.78% to change hands at $45.73 apiece. That dip may have reflected arbitrage investing activity that often accompanies transactions in which an acquirer funds its purchase with stock.
Bristol-Myers Squibb Co. Profile
Bristol-Myers Squibb Co. engages in the discovery, development, licensing, manufacture, marketing, distribution, and sale of biopharmaceutical products. It includes chemically-synthesized drugs or small molecules and products produced from biological processes called biologics. The company was founded in August 1933 and is headquartered in New York, NY. – CNN Money
Celgene Corp. Profile
Celgene Corp. is an integrated global biopharmaceutical company, which engages in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases. Its targeting areas include intracellular signaling pathways, protein homeostasis and epigenetics in cancer and immune cells, immunomodulation in cancer and autoimmune diseases and therapeutic application of cell therapies.
The company’s products include Revlimid, Vidaza, Thalomid, Pomalyst/Imnovid, Abraxane, and Istodax. Celgene was founded by David Stirling and Sol Barer in 1986 and is headquartered in Summit, NJ. – CNN Money