Astrazeneca share price tumbles as investors doubt merger with US rival
Astrazeneca’s share price declined sharply in early trading after investors cast doubt over the potential merger with its US rival.
The UK drugmaker’s shares suffered a six per cent decline in early trading to 11,866p, after reports it was exploring a possible $400bn megadeal with Bristol Myers Squibb.
The FTSE 100 giant has been holding talks with the US group in recent months over a possible tie-up, according to the Financial Times.
Similar FTSE takeovers and mergers have typically caused companies’ share prices to spike as investors anticipate the upside.
But Astrazeneca’s opening reaction has failed to reflect such setiment. Richard Hunter, head of markets at Interactive Investor said it sends “a clear signal that investors would potentially be opposed to such a deal”.
Astra US-UK spin
Hunter said the deal triggered questions over Astrazeneca’s ties to the UK, as chief executive Pascal Soriot pushes ahead with the firm’s pivot into the US.
Soriot has previously called the drugmaker a “very American company” and now operates 23 sites across 11 states, ranging from manufacturing to research and development.
Last September, the group upgraded its listing on the New York stock exchange, allowing American investors to buy it directly, in what was viewed as a blow to London.
The group also struck a $50bn deal with Donald Trump’s administration to invest in US manufacturing and research sites.
Despite this, the group has doubled down on its insistence that it will remain based in Cambridge and retain its London listing. It promised to plough £300m into its UK operations in April.
This new commitment came just months after it cancelled investments into a new lab in Cambridge and a site in Macclesfield, reassuring investors before news of the deal.
Hunter said: “It seems that investors are wondering why Astra would turn on its heels, having recently eschewed any M&A activity and having a strong pipeline which leaves it more than capable of standing on its own feet, at least until 2030.
“The additional distractions of such a deal, let alone any regulatory intrusion, would be even more complicated, coming at a time when the US appears to be doubling down on its domestic development rather than opening the door to a major international stake.”
Transaction jitters
The possible tie-up has also sparked fears that Astrazeneca, the UK’s second most valuable listed company behind only HSBC, could cause further damage to the FTSE, which has been hit with a wave of takeover deals in 2026.
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.
“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.”
Others have questioned the scale of the deal, with the combined valuation of $400bn outstripping past transactions.
This includes the merger of Vodafone and German telecom giant Mannesmann in 2000, which had a combined value of roughly $350bn.
Mould said “major transactions of this kind often run into difficulties”, including around integration. Both Astrazeneca and Bristol Myers Squibb have an “overlapping focus” in oncology leading to substantial antitrust scrutiny, particularly in the US.
Cancer treatments accounted for roughly $25bn of Astrazeneca’s 2025 sales. Oncology drugs also accounted for more than 40 per cent of Bristol Myers Squibb’s overall sales in the first six months of 2026.
“Getting a deal across the line could be as difficult as putting together a 10,000-piece jigsaw,” Mould said.
“Political pressure might also be brought to bear, particularly on these shores given the importance of AstraZeneca to UK plc.”