Is the Reported $400 Billion AstraZeneca-Bristol Myers Squibb Megamerger a Slam Dunk -- or a Disaster Waiting to Happen?
There's a good reason why AstraZeneca tanked when merger rumors hit the Street.
Overview
In recent weeks, two pharmaceutical stocks, AstraZeneca (NYSE: AZN) and Bristol Myers Squibb (NYSE: BMY), have become the subject of merger rumors. At the start of the month, the Financial Times dropped a potential bombshell when, in an exclusive report, it reported that the two companies, both considered blue chip stocks, were close to merging in a deal that would create an oncology-focused big pharma powerhouse worth around $400 billion.
Put simply, investors reacted negatively to the proposed deal, pushing AstraZeneca shares down by around 9% after the rumors first emerged. Subsequent headlines suggest that the proposed merger isn't likely to happen.
Details
Still, until confirmed, it may be best to assume that a deal is possible. While on the surface, it may look like a winner, a closer look validates the market's more negative take on the proposition.
Source
Originally published at www.fool.com.