Bristol-Myers to acquire Celgene in $74-billion deal, creating pharmaceutical giant

Bristol-Myers Squibb Co said today it would buy Celgene Corp for about US$74 billion. — Reuters pic

Bristol-Myers Squibb Co said today it would buy Celgene Corp for about US$74 billion. — Reuters pic

The company, which is buying biotech Celgene (ticker: CELG) for $74 billion in cash and stock, also made one of the earliest pharma acquisitions of a biotech, in 1986.

The transaction would "enhance" the duo's dominant position in the field of cancer treatments and immunology and inflammation, Bristol-Myers boss Giovanni Caforio said.

The combined company will have nine products with more than $1 billion each in annual sales and significant potential for growth in the core disease areas of oncology, immunology and inflammation and cardiovascular disease. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones.

Talks opened in September, with Bristol-Myers approaching Celgene, according to a source familiar with the matter.

Bristol-Myers shares fell 9.5 percent, to $47.10, while Celgene shares rose 33.5 percent, to $88.95, in premarket trading.

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Last year, Celgene bought experimental cancer drug developer Juno Therapeutics for $9bn, betting on its chimeric antigen receptor T-cell therapy, known as CAR-T, in a bid to reduce reliance on its mainstay drug, Revlimid.

The boards of both companies have already approved the deal and BMS noted that it expects merger to be complete in the third quarter of 2019.

The cash-and-stock portion of the deal totals $102.43, based on Wednesday's closing price of $52.43 for Bristol shares. It was formed by the 1989 merger of the Squibb Corporation, which was founded in 1858, and Bristol-Myers, which was founded in 1887. LLC are its financial advisers.

J.P. Morgan Securities LLC is serving as lead financial adviser and Citi is the financial adviser to Celgene.

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