AstraZeneca in talks over £300bn mega-merger with US rival – reports

Russ Mould, investment director at AJ Bell, said: “The speculated blockbuster merger between AstraZeneca and US rival Bristol Myers Squibb would have implications outside of the pharmaceutical sector.

“Assuming it went through, AstraZeneca would likely overtake HSBC to become comfortably the largest company on the FTSE 100.

“However, the fear will be that such a move, coming on top of the company’s recent direct listing in New York, would pull its centre of gravity across the Atlantic and ultimately see the UK stock market lose one of its crown jewels.

“Current CEO Pascal Soriot was a big player in the company’s decision to reject a takeover bid from Pfizer for £70 billion in 2014 and has been vindicated in the interim.

“A tie-up with Bristol Myers Squibb could help the business to reach its ambitious revenue goals, with North America already a key source of growth.

“The initial market reaction to the reports is highly circumspect, reflecting understandable caution about the scale of the deal. Major transactions of this kind often run into difficulties around integration and matching up different workplace cultures.

“Getting a deal across the line could be as difficult as putting together a 10,000-piece jigsaw with the companies’ overlapping focus in oncology likely to attract scrutiny from competition authorities.

“Political pressure might also be brought to bear, particularly on these shores given the importance of AstraZeneca to UK plc.”