AstraZeneca slides after report of Bristol Myers merger talks leaves analysts 'perplexed'

AstraZeneca shares dropped as much as 7% after a report that the U.K.'s largest drugmaker was in talks with U.S. peer Bristol Myers Squibb over a megadeal that, if completed, could value the companies at roughly $400 billion.

AstraZeneca declined to comment. Bristol Myers Squibb didn't immediately respond to a request to comment outside of normal working hours.

The companies have discussed a potential merger over several months, the Financial Times reported on Sunday. It would be one of the biggest pharmaceutical deals ever.

AstraZeneca's London-listed shares were last seen trading 6% lower in early morning trading, weighing on the U.K.'s blue-chip index FTSE 100, which was largely flat.

Shares of Bristol Myers rose 3.8% in U.S. premarket trading.

AstraZeneca and Bristol Myers Squibb shares over the past 12 months.

Coming into Monday trading, AstraZeneca had a market cap of $264 billion. That number has risen steadily over the past decade and since CEO Pascal Soriot took the reins in 2012 as the company has developed a solid pipeline of new drugs. It is targeting $80 billion in sales by 2030, up from $58.7 billion last year.

Bristol Myers' market cap is roughly $133 billion.

While details are scarce and sources told the FT a deal may still not come together, analysts were puzzled by the news.

"Given the strength of AZ's growth and innovation profile, we are a bit perplexed," Jefferies analysts wrote Monday morning. "Of course financial accretion can look good and maybe more cash generation would allow for more R&D. But if there is one company that doesn't need financial engineering, it's AZ."

One rationale for the reported deal talks could be AstraZeneca's strategic desire to move closer to the key U.S. market after the company completed a direct listing on the New York Stock Exchange earlier this year, replacing its earlier ADR program.

AstraZeneca's U.S. sales accounted for 42% of total sales in the first half of 2026, and it explicitly targets the U.S. market to ensure its growth targets. Meanwhile, Princeton, New Jersey-based Bristol Myers Squibb sourced 69% of revenues from the U.S. market in the last quarter.

The focus will likely be on the potential to establish an even bigger oncology powerhouse, with AstraZeneca's and Bristol Myers' combined portfolio of cancer drugs likely being the broadest in the industry, potentially attracting antitrust scrutiny, Jefferies said.

Citi analysts said that if the merger talks report were true, it would be a "surprise" given AstraZeneca's best-in-class pipeline.