AstraZeneca mulls €240bn mega-merger with Gilead Sciences

published 11 June 2020

Britain’s AstraZeneca has been considering “the biggest pharmaceuticals deal in history”, says Max Nisen on Bloomberg: merging with US peer Gilead Sciences to create a company with a market value of $240bn. The aim would be to combine AstraZeneca’s “enviable” drug pipeline with Gilead’s profitable HIV drug business, which has given it a “steady cash flow” and “strong balance sheet”.

Any merger with Gilead would be a bad mistake, says Ben Marlow in The Daily Telegraph. Not only is there “overwhelming” evidence that most mega-mergers end up destroying value, but the ongoing travel restrictions also mean that this one could “take several years to be negotiated”. In any case, with AstraZeneca at the forefront of developing a coronavirus vaccine as well as various treatments for those already infected with the disease, it needs to “concentrate on the day job”. The last thing managers should be doing is “wasting time” with “desktop empire-building”.Tentative talks seem to have gone nowhere, says Nils Pratley in The Guardian. Still, the fact that the idea was even broached at all will unnerve shareholders “who thought the future for the next few years was mapped out and rosy”.

With new cancer drug sales “soaring [and the]cardiovascular and respiratory divisions [ready] to deliver the next round of growth”, AstraZeneca’s CEO Pascal Soriot (pictured) should stick with his current strategy. Instead, he apparently dreams of “signing off in dreaded transformative style” with a deal that could prove “messy and political”.