CELG Celgene Corporation

By Aisha Al-Muslim 

Bristol-Myers Squibb Co. will acquire Celgene Corp. in a cash and stock transaction for about $74 billion, bringing together two major providers of treatments for cancer and inflammatory, immunologic and cardiovascular diseases.

Under the deal, Celgene shareholders will receive one Bristol-Myers Squibb share and $50 in cash for each share of Celgene, the companies announced Thursday.

Celgene shareholders will also receive one tradable Contingent Value Right for each share of Celgene. Each CVR will entitle its holder to receive a one-time potential payment of $9 in cash upon FDA approval of three drugs. A CVR is often used when buyers and sellers can't agree on a purchase price and typically tied to sales or regulatory targets.

The cash-and-stock deal represents about a 54% premium based on the closing stock price of Celgene on Wednesday. The cash portion will be funded through a combination of cash on hand and debt financing. The deal is expected to close in the third quarter.

When the deal is completed, Bristol-Myers shareholders would own about 69% of the combined company, while Celgene shareholders would own about 31%.

Bristol-Myers' Chief Executive and Chairman Dr. Giovanni Caforio will continue to serve in those roles of the combined company. Two members from Celgene's board will be added to the Bristol-Myers's board.

New York-based Bristol-Myers develops medicines that help patients with serious diseases. Summit, N.J.-based Celgene is involved in the development and commercialization of therapies for the treatment of cancer and inflammatory diseases.

The companies' products include cancer treatment medications Opdivo, Yervoy, Revlimid and Pomalyst; autoimmune and inflammation treatment medications Orencia and Otezla; and cardiovascular medicine Eliquis.

The combined company will have nine products with more than $1 billion in annual sales, with a pipeline that includes six expected near-term product launches representing more than $15 billion in revenue potential.

The combination is expected to boost Bristol-Myers Squibb's earnings per share by more than 40% on a standalone basis in the first full year after the deal closes.

Bristol-Myers Squibb expects to trim about $2.5 billion in costs by 2022. Bristol-Myers Squibb also expects to accelerate its share repurchase program of up to about $5 billion.

Separately, Bristol-Myers said Thursday its earnings per share guidance for 2019 will be in the range of $3.75 to $3.85 and forecast its adjusted earnings per share will range from $4.10 to $4.20. The guidance excludes the Celgene acquisition or any potential acquisitions and divestitures.

Bristol-Myers will provide its full guidance when the company reports fourth-quarter results on Jan. 24.

Shares of Bristol-Myers fell more than 11% in premarket trading Thursday, while Celgene's rose more than 32%.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

January 03, 2019 09:05 ET (14:05 GMT)

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