Bristol-Myers Squibb is spending $74 billion on fellow drugmaker Celgene in a deal aimed at stocking the combined company's development pipeline with cancer, immunology and cardiovascular treatments.
Bristol would gain the cancer treatment Revlimid in the cash-and-stock deal announced Thursday, as well as inflammatory disease treatments and several products close to launching.
The combined company will have nine products with more than $1 billion in annual sales. Bristol Chairman and CEO Giovanni Caforio said in a prepared statement that the combination will create a deep product portfolio that drives growth.
It was a hard sell, however, in premarket trading Thursday. Shares of Bristol plunged more than 15%. Celgene soared 31%.
Under terms of the deal, shareholders of Celgene Corp., based in Summit, New Jersey, will receive one share of Bristol-Myers Squibb plus $50 in cash for each share they own. They'll also receive one tradeable contingent value right for each Celgene share, allowing the holder to receive a payment when future regulatory milestones are hit.
The cash-and-stock portion of the deal total $102.43, based on Wednesday's closing price of $52.43 for Bristol shares. That represents a premium of nearly 54% to Celgene's closing price of $66.64.
Shareholders of Bristol-Myers Squibb Co., based in New York City, would own about 69% of the company, with Celgene shareholders owning about 31%.