Bristol-Myers Squibb to Acquire Celgene

On Jan 3, 2019

Bristol-Myers Squibb Company (BMS) announces it will acquire Celgene Corporation in a cash and stock transaction valued at $74 billion. The combined company’s product portfolio will include nine existing drugs, each with more than $1 billion in sales. There will also be significant potential for growth in core disease areas of oncology, immunology, inflammation and cardiovascular disease. Additionally, near-term launch opportunities represent greater than $15 billion in revenue potential.

According to Giovanni Caforio, M.D., chairman and CEO of BMS, 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.  We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches.”

Mark Alles, chairman and CEO of Celgene, commented, “Combining with BMS, we are delivering immediate and substantial value to Celgene shareholders and providing them meaningful participation in the long-term growth opportunities created by the combined company. Our employees should be incredibly proud of what we have accomplished together and excited for the opportunities ahead of us as we join with BMS, where we can further advance our mission for patients. We look forward to working with the Bristol-Myers Squibb team as we bring our two companies together.”

BMS has approximately 6,345 employees in New Jersey, based on New Jersey Business magazine’s “2018 Top 100 Employers” listing (published last August). Celgene has an estimated 3,000 employees in the state (based on the “2017 Top 100 Employers” listing). Celgene has its corporate headquarters in Summit, while BMS has various facilities throughout the state.

While there is no information on job creation or reduction due to the merger, BMS said it expects to realize run-rate cost synergies of approximately $2.5 billion by 2022. The company also said it is confident it will achieve efficiencies across the organization while maintaining a strong, core commitment to innovation and delivering the value of the portfolio.

The transaction, expected to close in the third quarter of 2019, is subject to approval by BMS and Celgene shareholders and the satisfaction of customary closing conditions and regulatory approvals. The boards of both companies have already approved the pending acquisition.

In the deal, Celgene shareholders will receive one Bristol-Myers Squibb share and $50.00 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. The Boards of Directors of both companies have approved the combination.

Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders at closing is valued at $102.43 per Celgene share and one CVR (as described below). When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69 percent of the company, and Celgene shareholders are expected to own approximately 31 percent.

Following the close, Dr. Caforio will continue to serve as BMA Chairman and CEO. Two members from Celgene’s Board will be added to the Board of Directors of Bristol-Myers Squibb. The combined company will continue to have a strong presence throughout New Jersey.

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