Will the world's fourth-largest pharmaceutical giant be born? AstraZeneca and BMS push for a 577 trillion won M&A deal

[Financial News] AstraZeneca, one of the UK's largest pharmaceutical companies, is in talks with U.S. rival Bristol Myers Squibb on a mega-merger worth a combined $400 billion, or about 577 trillion won.
On the 2nd, local time, the Financial Times reported, citing people familiar with the matter, that the two companies have been discussing a merger over the past few months. The deal could be finalized soon, but it could also be delayed or fall apart.
AstraZeneca's market capitalization currently stands at about 196 billion pounds, or roughly 382 trillion won, while BMS is valued at about $133 billion, or around 192 trillion won.
If completed, the deal would rank among the largest M&A transactions in pharmaceutical history. The merged company would instantly become the world's fourth-largest drug giant by market capitalization. The exact structure of the transaction has not been confirmed, but it is expected to involve a mix of cash and stock. AstraZeneca declined to comment, and BMS did not immediately respond.
FT said the merger would likely give longtime AstraZeneca CEO Pascal Soriot a decisive opportunity to expand the company's presence in the U.S., its largest market.
When Pfizer Inc. tried to acquire AstraZeneca for 70 billion pounds in 2014, Soriot firmly rejected the offer. He later strengthened the company's oncology portfolio and turned it into the giant it is today.
The move is being watched closely in British financial circles. If the merger goes through, concerns in the UK that AstraZeneca could shift its headquarters to the U.S. are likely to intensify. AstraZeneca upgraded its listing on the New York Stock Exchange (NYSE) in June, alongside its London listing.
AstraZeneca has set an ambitious goal of reaching $80 billion in sales by 2030, and growth in the U.S. market, which accounts for nearly half of its revenue, is essential.
The deal would surpass AstraZeneca's 2021 acquisition of rare-disease specialist Alexion for $39 billion and become the largest in the company's history.
Meanwhile, BMS acquired Celgene for $74 billion in 2019, but the deal fell short of expectations and the company has been viewed as a slow grower in the industry. It also faces the challenge of offsetting a major revenue decline in the coming years as patents expire on key drugs.
There are still many hurdles before the merger can be completed.
Both companies have strong oncology portfolios, so the deal is likely to face close scrutiny from antitrust regulators.
Strong political backlash is also expected in the UK over the possibility that AstraZeneca could move to the U.S.
In the U.S., deregulation is gaining momentum, and the Trump administration has taken a favorable stance toward corporate M&A. That could be a key factor as the domestic deal market heats up to record levels.
BMS shares have risen 21% so far this year, while AstraZeneca shares have fallen 8%.

[email protected] Yoon Jae-jun Reporter