“FIFA moment”: Rumors about a mega deal in the pharmaceutical industry

There was initially no statement from the two pharmaceutical companies on the report on Monday, but the rumor caused a stir on the stock market. Bristol Myers shares rose 4 percent, while AstraZeneca lost more than 6 percent on the London Stock Exchange.

“FIFA moment”

The takeover would make AstraZeneca, a leading provider of cancer drugs, one of the world’s largest drug manufacturers, but analysts and investors see this critically. “A merger of AstraZeneca with Bristol Myers Squibb makes neither strategic nor financial sense,” said Markus Manns, portfolio manager at shareholder Union Investment. “If the merger rumors are true, this would be the FIFA privatization moment for the pharmaceutical industry.” It is a poorly thought-out proposal that is met with incomprehension by many market participants.

In 2014, AstraZeneca was able to fend off a takeover attempt by US competitor Pfizer. The British government intervened because it feared the loss of an important British company. The US government under President Trump could now think the same and oppose a merger. There are also antitrust hurdles. Both companies generate a significant portion of their sales from cancer drugs, some of which compete directly with each other.