Sector News

Bristol issues $19B in bonds to help fund Celgene buy

May 9, 2019
Life sciences

Get involved in the discussion! Click here to comment on this story

Bristol-Myers Squibb is taking on a debt load to cover its $74 billion Celgene buyout, and it issued $19 billion in bonds Tuesday to help pay the bill.

Bristol-Myers issued bonds in nine tranches that come due starting next year and stretch all the way out into 2049. In all, Bristol wants to take on $32 billion in new debt itself, plus $20 billion in Celgene debt, to fund the deal, the drugmaker said in a presentation (PDF) outlining the proposed merger.

But BMS doesn’t plan to carry that burden for long. Company executives have said they’re planning to quickly put their money to work paying down that load. The combined company would have $45 billion in free cash flow in the first three years after closing, BMS has said.

“Our priorities for capital deployment moving forward include rapidly paying down debt over the next few years, improving our credit metrics, and we expect to continue to increase our dividend,” Bristol CEO Giovanni Caforio said on the company’s first-quarter conference call.

Bristol announced the massive Celgene buy back in early January. In touting the deal, executives said the combined company would be the top player in oncology and cardiovascular diseases, plus a top 5 company in immunology and inflammation. It’d have nine products with more than $1 billion in annual sales plus six near-term launches.

The deal faced activist investor pushback in the months that followed, but investors signed off on the acquisition in April.

It’s far from the first time a pharma company has issued billions of dollars worth of bonds to finance an acquisition. Roche in 2009 issued $16 billion in bonds to fund its Genentech buy. More recently, Teva Pharmaceutical issued $20 billion worth of bonds to buy Allergan’s generics unit.

Bristol’s bond deal is the largest in any industry so far this year and 10th-largest of all time, Bloomberg reports.

By Eric Sagonowsky

Source: Fierce Pharma

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 18, 2019

Bristol-Myers’ $74B Celgene buy wins antitrust nod in FTC party-line split vote

Life sciences

LinkedIn Twitter FacebookIndustry watchers largely expected that Bristol-Myers Squibb and Celgene would win U.S. antitrust clearance for their $74 billion merger. But what’s perhaps unexpected is that the permission was […]

November 18, 2019

Novartis pivots Shanghai R&D site from early discovery to development

Life sciences

LinkedIn Twitter FacebookNovartis is calling it curtains on early drug discovery at its R&D site in Shanghai in a companywide move to “rebalance” its discovery and early development efforts. The […]

November 15, 2019

Merck builds in CNS diseases with $576m Calporta buy

Life sciences

LinkedIn Twitter FacebookMerck & Co has had mixed fortunes in neurological diseases of late, but remains committed to the category and has just bolstered its early-stage pipeline with a $576 […]

Subscribe to our Weekly Newsletter

We're easy to reach