Bristol-Myers said Celgene investors would receive one Bristol-Myers share and $50 in cash for each Celgene holding, as well as a special rights issue that will pay off if the merged group meets certain business targets. The deal values Celgene at $102.43 each, the companies said, a 53.7% premium to Wednesday's closing price. The combined group -- which will be 69% owned by Bristol-Myers -- would have a portfolio with nine drugs that generate more than $1 billion in sales, the companies 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," said CEO Giovanni Caforio. "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," he added. "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."
Bristol-Myers shares fell 13.3% on Thursday to $45.12, while Celgene shares jumped 20.7% to $80.43.
Bristol-Myers also published preliminary 2019 earnings guidance alongside the Celgene merger announcement that looks moderately higher than the Street consensus.
The company said it sees non-GAAP earnings of between $4.10 and $4.20 per share, topping the $4.07 estimate from Refinitiv IBES but excluding the impact of the Celgene acquisition, and will plan an accelerated share buyback worth around $5 billion.
Bristol-Myers was told by the U.S. U.S. Food & Drug Administration in October that the agency extended the approval date for a market approval for its key 'Opdivo plus Yervoy' cancer therapy combination until May 2019.