Bristol-Myers Still Waiting For FTC Approval of Celgene Takeover

Shares of Bristol-Myers Squibb took a big dip to start the week after the group announced the US Federal Trade Commission (FTC) is still examining their proposed $74 billion acquisition of cancer specialist Celgene Corporation.  Offering to sell the company’s psoriasis business to move the deal forward, the FTC’s hesitancy seemed to affect investors, who pushed the BMY stock down near the bottom of the Standard & Poors 500 Index on Monday. 

Bristol-Myers attests they are still “actively engaged” in these discussions with the FTC while they continue to review the proposal. Firs announced in January BMY shareholders still did not give approval of the buyout until April, so the consideration is not too long withstanding.  But Bristol-Myers is holding onto hopes that they will be able to move forward with the deal heading into next year, particularly since Bristol-Myers is also pursuing approval from the European Commission.

In a statement, the company said, “Bristol-Myers Squibb is committed to working with regulatory authorities around the world on the proposed combination with Celgene.  The Company is focused on realizing the promise of the transaction, and is continuing to work to complete the transaction on a timely basis.”

This acquisition could not come at a better time for either company.  Shares of Bristol-Myers opened the week more than 7 percent after rising only 0.2 percent in the pre-market session, to $45.70 per share.  This extends the firm’s decline, on the year, to 12 percent down.  In addition, Celgene shares are down 5 percent, to $93.36 each.

Bristol-Myers’ statement goes on to explain the merger’s benefits. It continues, “Bristol-Myers Squibb reaffirms the significant value creation opportunity of the acquisition of Celgene. Together with $2.5 billion of cost synergies, a compelling pipeline and a strong portfolio of marketed products, the Company continues to expect growth in sales and earnings through 2025.”  

At the end of the day, Bristol-Myers boosted its GAAP earnings forecast to register within the range of $3.84 to $3.94 per share. In addition, the company expects a gross margin of approximately 70 percent of revenues. On the other side, Bristol-Myers forecasts non-GAAP earnings will register in the $4.10 to $4.20 range, per share.  All in all, the company managed to secure 75 percent shareholder support in favor of the $74 billion Celgene takeover.