Bristol-Myers Squibb agreed to acquire global biopharmaceutical company Celgene in a cash and stock transaction with an equity value of approximately $74 billion. Morgan Stanley Senior Funding and MUFG Bank will provide the fully committed debt financing to support the transaction.
Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones.
Based on the closing price of Bristol-Myers Squibb stock on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders is valued at $102.43 per share. The cash and stock consideration represents an approximately 51 percent premium to Celgene shareholders based on the 30-day volume weighted average closing stock price of Celgene prior to signing.
The Boards of Directors of both companies have approved the combination.
The transaction will create a specialty biopharma company focused on the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease through high-value innovative medicines and leading scientific capabilities.
When the acquisition is completed, Bristol-Myers Squibb shareholders are expected to own approximately 69% of the company, while Celgene shareholders will own approximately 31%.
“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 Giovanni Caforio, M.D., chairman and CEO of Bristol-Myers Squibb. “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. 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.”
Following the close of the transaction, Bristol-Myers Squibb expects that substantially all of the debt of the combined company will be pari passu.
Both boards of directors have approved the merger. Closing is expected for the third quarter of 2019, subject to approval by Bristol-Myers Squibb and Celgene shareholders and regulators and the satisfaction of customary closing conditions.
Morgan Stanley & Co. is serving as lead financial advisor to Bristol-Myers Squibb on the acquisition, while Evercore and Dyal Co. served as its financial advisors and Kirkland & Ellis as its legal counsel. J.P. Morgan Securities is serving as lead financial advisor and Citi as financial advisor to Celgene, while Wachtell, Lipton, Rosen & Katz serves as Celgene’s legal counsel.
