Bristol-Myers Squibb (BMS) has entered into a definitive merger agreement to acquire Celgene via a cash and stock transaction with an equity value of $74bn; Celgene shares have been valued at $102.43 per share.
The boards of directors of both companies have approved the deal.
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By GlobalDataAccording to the agreement, Celgene shareholders will receive one BMS share, the closing price of BMS stock was $52.43 on 2 January this year, and $50 in cash per share.
BMS expects a global, speciality biopharma company to be created with a particular focus on cancer, inflammation and immunologic diseases and cardiovascular diseases.
The new company will have a product portfolio comprising of nine products with more than $1bn in annual sales, six near-term launch opportunities with more than $15bn revenue potential and 50 high potential assets in the early stage pipeline offering positive growth.
BMS shareholders are expected to own 69% of the combined company, while Celgene shareholders will own the remaining 31%.
BMS CEO and chairman Giovanni Caforio said: “Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases.”
“As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches.
“Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.”
Celgene chairman and CEO Mark Alles said: “Combining with Bristol-Myers Squibb, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company.
BMS expects the rate of return from this acquisition o be in excess of both its and Celgene’s cost capital and a more than 40% accretive of BMS’ earnings per share on a standalone basis in the first full year.
