Bristol-Myers gets shareholder approval for $74B Celgene deal

Bristol-Myers Squibb Co. on Friday won a shareholder vote to approve its roughly $74 billion takeover of Celgene Corp., paving the way to close the largest pharmaceutical merger in history and create a cancer-drug giant.

More than 75 percent of Bristol-Myers shareholders voted to approve the deal, according to a preliminary tally announced by the company. The victory comes after opposition by a handful of top Bristol-Myers investors, who argued that the New York-based drugmaker should instead sell itself or stay independent.

“We are creating the science leader, the company that’s No. 1 in oncology,” Bristol-Myers CEO Giovanni Caforio said at a shareholder meeting in New York where the results were announced. “The focus is on us now to execute the integration and deliver the value of the combined portfolio.”

The merged company will have almost $40 billion in revenue. The deal will diversify Bristol-Myers’s pipeline of experimental drugs and reduce its reliance on two on-the-market medicines that dominate its sales, the blood thinner Eliquis and the cancer treatment Opdivo.

Celgene sells an aging megablockbuster, the cancer pill Revlimid, that will begin to face competition from cheaper copies in 2022 but still brings in about $10 billion a year. It also has a pipeline of experimental drugs, including a number of partnerships with smaller biotechnology firms, to develop new oncology therapies.

Deal terms

For each share of Celgene that holders own, they’ll get $50 in cash and one share of Bristol-Myers. The deal was worth about $74 billion when announced, though the value of the takeover has fluctuated with Bristol-Myers stock. About 98 percent of Celgene holders who voted did so in favor of the deal, the company said in a statement.

Caforio said at the shareholder meeting that there won’t be a change to the company’s dividend policy after the deal closes. Two Celgene directors to be named later will join the combined board, he said. The company expects the deal to close in the third quarter, Caforio said.

Celgene shares rose 0.1 percent, to $94.34 each, on Friday morning. Bristol-Myers shares were down 0.8 percent, to $45.73. The spread between Summit, New Jersey-based Celgene shares and the offer value has been narrowing as investors have grown more confident the deal will close.

After the deal was announced in January, some top Bristol-Myers shareholders opposed it.

Wellington Management Co., Bristol-Myers’s No. 2 holder, said in February that it didn’t think the merger was the right path for the company. And activist investment firm Starboard Value said it would start a proxy fight to block the takeover bid and install several board members.

Starboard called off its efforts in late March after two prominent shareholder-advisory firms, Institutional Shareholder Services Inc. and Glass Lewis & Co., urged investors to support the transaction.

Not everyone is sold on the merits.

“We remain concerned over product concentration,” Ashtyn Evans, an analyst at Edward Jones & Co. who has a hold rating on Bristol-Myers shares, said in an interview earlier this week. “I would have liked to see Bristol buy more pipeline assets rather than establish products like Revlimid. While this will give them additional expertise in cancer, the concentration adds an element of risk.”

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