AstraZeneca, Britain’s biggest drugmaker, has held discussions about a potential takeover of its U.S. rival Bristol Myers Squibb in a deal that would value the combined group at roughly $400 billion and create the world’s fourth-largest drugmaker by market value, according to a report first published by the Financial Times.
The talks, held in recent months, sent AstraZeneca’s London-listed shares plunging more than 7% to a low of £116.46 in early trading on Monday, weighing on the FTSE 100. Bristol Myers Squibb’s shares jumped 8% in pre-market trading in New York. AstraZeneca declined to comment, and Bristol Myers Squibb did not immediately respond to requests for comment outside normal U.S. business hours. Sources told the Financial Times that a deal may never materialize.
If completed, the merger would rank among the largest pharmaceutical tie-ups ever. AstraZeneca, run by longtime chief executive Pascal Soriot, is the second-biggest listed company in the U.K., with a market value of nearly £196 billion before the news broke. Bristol Myers, headquartered in Princeton, New Jersey, is worth $133 billion. Coming into Monday trading, AstraZeneca had a market capitalization of $264 billion.
Analysts question the rationale
Analysts were puzzled. Jefferies analysts, led by Michael Leuchten, wrote Monday morning that given the strength of AstraZeneca’s growth and innovation profile, they were a bit perplexed. They noted that financial accretion can look good and more cash generation would allow for more research and development, but added that if there is one company that does not need financial engineering, it is AstraZeneca. Citi analysts called the report a surprise given AstraZeneca’s best-in-class pipeline.
John Murphy, a senior pharma analyst at Bloomberg Intelligence, said a deal made limited strategic sense for AstraZeneca. He pointed to divergent growth outlooks, with double-digit earnings gains forecast at AstraZeneca through 2030 and Bristol Myers set for continued declines due to multiple patent expiries. He also warned that history suggests such megamergers hamper pipeline progress. Major cost savings from eliminating overlapping infrastructure would be one obvious benefit, he said, but would suggest reduced confidence at AstraZeneca in its own pipeline and growth outlook.
Chris Beauchamp, a chief market analyst at the investment platform IG, said the pair’s large cancer divisions present a major hurdle to a successful deal. He added that some AstraZeneca shareholders will wonder at the need to do expensive acquisitions when their shares are doing so well. Bristol Myers has struggled since 2023.
Pipeline overlap and antitrust scrutiny
The companies overlap in oncology, cardiovascular disease, and immunology, though their pipelines are largely complementary. AstraZeneca is stronger in solid tumors, while Bristol Myers Squibb is more focused on blood cancers and cell therapies. Jefferies said the combined portfolio of cancer drugs would likely be the broadest in the industry, potentially attracting antitrust scrutiny. The analysts also argued that pipeline assets could be sourced elsewhere, as AstraZeneca has been doing, particularly in China.
Bristol Myers is facing loss of exclusivity for multiple drugs. It is expected to see declining growth from next year as patents expire and top-selling drugs like its blood thinner Eliquis and cancer medicine Opdivo start to face generic competition. The company has major trial readouts looming for its newer blood thinner milvexian and the expansion of the label for its schizophrenia drug Cobenfy, making pipeline synergies between the two companies uncertain, according to RBC Capital Markets analysts. A few days before the merger talks were reported, Bristol Myers beat Wall Street expectations with its second-quarter results, making revenues of $12.97 billion, up 5% on a year earlier excluding currency movements, and lifted its 2026 outlook.
One rationale for the reported talks could be AstraZeneca’s strategic desire to move closer to the key U.S. market. AstraZeneca completed a direct listing of its shares on the New York Stock Exchange in June, replacing its earlier ADR program. AstraZeneca’s U.S. sales accounted for 42% of total sales in the first half of 2026, and the company explicitly targets the U.S. market to ensure its growth targets. Bristol Myers sourced 69% of revenues from the U.S. market in the last quarter. AstraZeneca is already investing $50 billion in research and manufacturing in the U.S. by 2030.
AstraZeneca, headquartered in Cambridge, was formed in 1999 from the merger of the Swedish company Astra AB and the U.K. company Zeneca Group. Under Soriot, who took the reins in 2012, the company fended off a hostile bid from Pfizer in 2014 that valued it at almost £70 billion. Its share price has more than quadrupled during his leadership, when it overtook its U.K. rival GSK in size. A week ago, AstraZeneca said it was confident of hitting its growth targets for 2030, by which it expects to achieve $80 billion in annual sales, up from $59 billion last year, despite the surprise failure of Wainua, one of its leading heart disease drugs in development. Soriot said the company must move at Chinese speed to ensure it does not fall behind competitors.
Bristol Myers employs about 800 people in the U.K. Its U.K. research team of 250 people is based at Moreton on the Wirral peninsula near Liverpool, while its commercial head office for the U.K. and Ireland is in Uxbridge. A deal with Bristol Myers could revive fears of a shift away from the U.K., a concern that has shadowed AstraZeneca since its New York listing. There is no certainty that a deal will be concluded, according to sources.