AstraZeneca dumped by investors over £300bn US merger talks
Pascal Soriot has described AstraZeneca as a ‘very American company’ – Kent Nishimura/Reuters AstraZeneca shares have taken an £18bn hit after investors baulked at reports it was plotting a mega-merger with a US rival. Shares in Britain’s second-most valuable company slumped on Monday after it emerged that AstraZeneca had held talks about a potential $400bn…
Pascal Soriot has described AstraZeneca as a ‘very American company’ – Kent Nishimura/Reuters
AstraZeneca shares have taken an £18bn hit after investors baulked at reports it was plotting a mega-merger with a US rival.
Shares in Britain’s second-most valuable company slumped on Monday after it emerged that AstraZeneca had held talks about a potential $400bn (£300bn) tie-up with Bristol Myers Squibb.
If completed, the merger would create one of the world’s largest pharmaceutical businesses. The potential deal would also raise fears that AstraZeneca could shift its business to the US in a blow to Britain.
However, analysts said it was a high-risk deal that risked destroying more value than it created. It would be one of the biggest mergers of all time, meaning any missteps could prove hugely costly,and would be likely to draw the attention of competition regulators and politicians.
News of the talks, first reported by the Financial Times, sent AstraZeneca’s shares plunging 9pcon Monday to their lowest level since September 2025.
Markus Manns, a portfolio manager at Union Investment and an AstraZeneca shareholder, told Reuters: “A combination with Bristol does not make strategic or financial sense.
“Many past mega-mergers have destroyed value and there is no apparent need for Astra to do it.”
Jefferies analysts said in a note: “If there is one company that doesn’t need financial engineering, it’s AstraZeneca.”
Michael Leuchten, an analyst at Jefferies, said he was “perplexed” by the potential takeover. He said investors backed the company because of its consistent sales growth, not because management “go out and do big deals”.
AstraZeneca is worth around £184bn on the London Stock Exchange, while New York-listed Bristol Myers Squibb has a market value of $133bn.
Bristol Myers Squibb shares surged as much as 3.8pc on Wall Street on Monday.
Analysts said competition concerns would be the biggest hurdle to a deal as both companies have large cancer treatment businesses.
The potential deal could also trigger a political backlash from Donald Trump’s administration, Jefferies warned.
Mr Leuchten added: “AstraZeneca would effectively be a UK-based acquirer of one of America’s large Pharmas, at a time when US policymakers are focused on domestic manufacturing and strategic industries.”
The deal would raise questions about AstraZeneca’s continued links to Britain as Sir Pascal Soriot, its chief executive, pushes ahead with a pivot towards the US.
AstraZeneca upgraded its listing on the New York Stock Exchange last September to let American investors buy its shares directly, while keeping its listing in London.
The move put AstraZeneca’s New York listing on a par with that of London, in what was seen as a blow to the UK’s struggling stock market.
AstraZeneca subsequently struck a $50bn deal with the Trump administration to invest in US manufacturing and transatlantic research facilities.
At the time, Sir Pascal described the drugmaker as a “very American company”.
Pascal Soriot announced a $50bn deal with Donald Trump last October – Alex Brandon/AP
The business subsequently agreed to sell some medicines at a discount to the US Medicaid programme to avoid being hit with tariffs.
Despite this, Britain’s biggest drugmaker has insisted that it intends to remain headquartered in Cambridge and retain its listing on the London Stock Exchange.
Mr Leuchten said buying Bristol Myers Squibb as a way to shift permanently to the US would be “a fairly drastic way to go about it”.
However, Neil Birrell, the chief investment officer at Premier Miton, an AstraZeneca shareholder, said the likelihood of the pharmaceutical business shifting its shares to the US would increase if the Bristol Myers Squibb deal went ahead.
Mr Birrell added: “There hasn’t been a huge amount that I’ve seen coming out from any of the authorities – whether it be the Government or the London Stock Exchange – of any great substance to try and keep these sort of companies here.”
The Prime Minister said the talks were “a private matter for the companies involved”.
A No 10 spokesman said: “More broadly, the UK life sciences sector is one of our greatest national assets, driving innovation, skilled employment and investment across the country while developing medicines that improve health outcomes and save lives.”
AstraZeneca has around 10,000 staff at five UK sites, including 4,000 at its main facilities in Cambridge and Macclesfield and another 2,000 in London and Luton.
Steve Boden, a regional organiser at GMB Union, said he was seeking urgent assurances from AstraZeneca that jobs would be protected.
“These reports of a merger are causing great concern amongst AstraZeneca’s loyal workers. While no deal has been formally announced, mergers can create pressure to cut costs, so staff are understandably worrying about what this could mean for them.”
The proposed mega-merger will evoke memories of Pfizer’s attempts to take over AstraZeneca a decade ago.
The US company’s acquisition ultimately collapsed after a wave of resistance from the board and politicians alike.
Ed Miliband, then Labour leader, said at the time that Pfizer’s assurances about protecting research and saving jobs were “worthless”.
Bristol Myers Squibb is headquartered in Princeton, New Jersey, and was started in 1858, making it one of the US’s oldest pharmaceutical companies.
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