After Its Celgene Acquisition, Bristol-Myers Squibb's Future Looks Bright
Bristol-Myers Squibb's (NYSE: BMY) acquisition of the biopharmaceutical company Celgene -- one of the most expensive acquisitions in the history of the pharmaceutical industry -- didn't exactly go smoothly. First, the cash and stock transaction valued at $74 billion encountered some opposition from unhappy Bristol-Myers shareholders. In particular, the company's largest institutional shareholder -- Wellington Management -- expressed its discontent with the transaction. Wellington Management argued that although Bristol-Myers should be "active in business development," the acquisition of Celgene put added (and unnecessary) risk on Bristol-Myers' investors.
Second, to make the approval process go a bit easier with the U.S. Federal Trade Commission (FTC), which had reservations about the merger due to antitrust concerns, Bristol-Myers announced it would be selling Celgene's psoriasis drug Otezla. At the time, the company thought this development would push the closing of the acquisition to the first quarter of 2020, instead of it closing in the third quarter of the current fiscal year.
However, the FTC cleared the merger on Nov. 15 and Bristol-Myers officially closed the acquisition on Nov. 20. Although the closing of the deal was a bit delayed, the delay wasn't as bad as originally announced. Bristol-Myers' stock has been volatile throughout this process. The company's stock sank when the acquisition was first announced, and dropped again when Bristol-Myers announced it would be selling Celgene's Otezla. Now that the dust has settled, though, those who own shares of this newly formed entity have much to look forward to.
Source Fool.com
