8-KMaterial AgreementsExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Material Agreement (Jan 4, 2019)

Filed January 4, 2019For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) announced a significant development with the filing of an 8-K on January 3, 2019, detailing the entry into a material definitive agreement to acquire Celgene Corporation. This strategic move involves a "Merger Agreement" where Bristol-Myers Squibb will acquire Celgene in a cash and stock transaction, plus a contingent value right (CVR). Each Celgene share will be converted into $50.00 cash, one share of BMY common stock, and one CVR, which could yield an additional $9.00 in cash if specific regulatory and commercial milestones for key drug candidates are met by specified dates. The transaction is subject to customary closing conditions, including regulatory approvals and stockholder votes from both companies.

Key Highlights

  • 1Bristol-Myers Squibb (BMY) to acquire Celgene Corporation in a definitive merger agreement.
  • 2The acquisition will be an all-stock deal with a cash component and a contingent value right (CVR).
  • 3Each Celgene share will be exchanged for $50.00 cash, one share of BMY common stock, and one CVR.
  • 4The CVR provides an additional $9.00 in cash if specific regulatory and commercial milestones for JCAR017, Ozanimod, and BB2121 are achieved by the set deadlines.
  • 5The transaction is subject to customary closing conditions, including stockholder approvals from both BMY and Celgene, and antitrust reviews.
  • 6BMY has secured a $33.5 billion bridge loan facility to finance the acquisition.
  • 7Two Celgene board members will join the BMY board upon closing the transaction.

Frequently Asked Questions

While the 8-K filing details the exchange ratio per share, it does not provide a total transaction value. Investors will need to refer to subsequent filings, such as the Form S-4 registration statement, which will include a prospectus detailing the aggregate value, expected to be in the tens of billions of dollars based on the per-share consideration and outstanding shares of Celgene.

The CVR entitles holders to $9.00 in cash if three specific Celgene drug candidates achieve certain milestones: JCAR017 for diffuse large B cell lymphoma by December 31, 2020; Ozanimod for relapsing multiple sclerosis by December 31, 2020; and BB2121 for multiple myeloma by March 31, 2021. These milestones involve FDA approval for commercial manufacture, marketing, and sale in the United States for the specified indications.

Bristol-Myers Squibb has entered into a commitment letter for a $33.5 billion senior unsecured bridge term loan facility. This facility will be used to finance the acquisition if Bristol-Myers Squibb has not raised sufficient funds through other debt issuances, term loans, revolving credit facilities, or commercial paper prior to or concurrently with the merger closing.

If the merger agreement is terminated under certain specified circumstances, such as Celgene entering into a superior proposal or BMS terminating to pursue a superior proposal, a termination fee of $2.2 billion may be payable by either party to the other.