Economy News

AstraZeneca loses £17bn in a day on reports of a $400bn Bristol Myers Squibb merger

More than £17bn was wiped off AstraZeneca on Monday 3 August after the Financial Times reported it was in talks to take over US rival Bristol Myers Squibb (BMS) in a deal that would create a pharmaceutical group worth close to $400bn, The Guardian reports. The shares fell 8.9% to £115 in London, cutting its value to about £178bn and handing Shell the title of the UK's second-biggest listed company. BMS, worth $133bn, rose 1.7% before giving up its gains.

A tie-up would be one of the biggest pharma deals ever and create the world's fourth-largest drugmaker by market value. It would also deepen AstraZeneca's US presence, where it is investing $50bn by 2030 and listed its shares directly in New York in June, reviving fears of a shift away from the UK.

“I am not a big fan of mega-mergers, it kills innovation and agility.” — Lukas Leu, ATG Healthcare Investments, via The Guardian

How each outlet framed it

• The Guardian — scepticism from analysts and shareholders: Jefferies said the “why” was not yet clear, and both firms' large cancer divisions could worry regulators.
• Hargreaves Lansdown — the investor-platform view of the reported $400bn tie-up talks.
• AAP (via Michael West Media) — the Australian framing of a “$570b mega-merger”, the deal's size in Australian dollars.

What happened next: on Wednesday 5 August Reuters reported there were no ongoing discussions, and AstraZeneca's shares staged a small relief rally, The Guardian's Nils Pratley wrote. Neither company has told shareholders what happened.