AstraZeneca shares tumble 7% after reported Bristol Myers talks

AstraZeneca shares plummeted 7% after reports of preliminary talks with Bristol Myers Squibb, sparking investor and analyst concerns over the strategic logic of a potential $400 billion merger.

​AstraZeneca shares tumbled ‌7% in early ​trading on Monday following reports of talks between the European pharmaceutical ‌giant and U.S.-based Bristol Myers Squibb, baffling investors and analysts.

A person familiar with the matter told Reuters that the ‌two held preliminary talks about a possible combination, potentially creating ‌one of the world's biggest pharmaceutical companies with a combined value of nearly $400 billion, confirming an earlier report by the Financial Times. Investors ⁠and ​analysts questioned ⁠the strategic logic of the possible tie-up, saying Britain's biggest drugmaker ⁠had little obvious need for a transformative acquisition despite potential financial ​benefits.

"A combination with Bristol does not make strategic or financial ⁠sense," said Markus Manns, portfolio manager at Union Investment, an AstraZeneca ⁠shareholder. "Many ​past mega-mergers have destroyed value and there is no apparent need for Astra to do it." As of ⁠Friday, AstraZeneca had a market capitalization of $264.11 billion while ⁠Bristol Myers ⁠was valued at $133.41 billion.