Bristol Myers Squibb (BMY) and AstraZeneca (AZN) are all set to buy and jointly develop Amylin Pharmaceuticals (AMLN). Meanwhile, AstraZeneca and Merck (MRK) have repaired and continued their longstanding relationship, and GlaxoSmithKline (GSK) continues to fight for the acquisition of Human Genome Sciences (HGSI). But what, exactly, do these real and potential partnerships and acquisitions mean for these stocks, and what are the ramifications for stockholders?
The Bristol-Myers Squibb/AstraZeneca purchase of Amylin appears to be going through without a hitch. The acquisition has been “unanimously approved” by the Bristol board of directors as well as the Amylin board of directors. In addition they have unanimously recommended that stockholders in Amylin tender their shares to the tender offer. AstraZeneca’s role only comes into play once the acquisition has been finalized between Bristol and Amylin. Bristol will acquire Amylin for $31 per share in cash, pursuant to a cash tender offer and second step merger, or an aggregate purchase price of approximately $5.3 billion. In addition to this, Bristol will be responsible for paying a contractual obligation to Eli Lilly (LLY), which will cost the company in the region of $1.7 billion. In total, then, Bristol will pay in the region of $7 billion to acquire Amylin.
The partnership between Bristol and AstraZeneca is one of the partnerships that I feel is a good move for both companies. The two companies are already collaborators in terms of their diabetes alliance. As a result of the acquisition of Amylin, AstraZeneca will be liable for $3.4 billion in cash paid to Amylin. To continue reading, click here.