Bristol-Myers kicks off 2019 M&A season with $74 billion deal

Bristol-Myers Squibb (NYSE:BMY) sparked excitement this morning, saying it has entered into a definitive merger agreement to acquire fellow USA-based biotech Celgene (Nasdaq: CELG) in a cash and stock transaction with an equity value of around $74 billion, comfortably exceeding the biggest M&A deal announced in 2018, ie, Takeda’s (TYO: 4502) buy of rare disease company Shire (LSE: SHP).

Shares of Bristol-Myers plunged 11.96% to $46.16 pre-market following the announcement, while Celgene leapt 32.56% to $88.34.

Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers share and $50.00 in cash for each share of Celgene. That would value Celgene at $102.43 a share, a 54% premium to the stock’s closing price on January 2. 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. The boards of directors of both companies have approved the combination.