Bristol-Myers → Squibb
A friendly $12bn share swap agreed in July 1989 that joined Bristol-Myers, a maker of consumer brands and cancer drugs, with Squibb, maker of the blood-pressure drug Capoten, and left only Merck larger among the world's drug companies.
An all-stock merger that created what was then the second-largest pharmaceutical company in the world.
- Value
- $12.5B
- Announced
- July 1989
- Completed
- October 1989
- Sector
- Pharma
- Deal type
- merger
- Acquirer
- Bristol-Myers (United States)
- Target
- Squibb (United States)
Why it mattered
Each side had what the other lacked. Bristol-Myers sold Ban, Excedrin and Drano alongside its prescription medicines and needed new drugs; Squibb had a near-lock on the hypertension market but leaned heavily on one product, Capoten, which had sales of $1.065bn in 1988 and faced newer rivals. As one analyst put it, Bristol-Myers needed Squibb's drugs and Squibb needed diversity.
Under the agreement signed on 26 July, Bristol-Myers exchanged 2.4 of its shares for each Squibb share, issuing about 242 million shares worth $11.98bn at the next day's close. Squibb's stock jumped $24.75 to $112.50. To discourage hostile interlopers, Squibb gave Bristol-Myers an option to buy about 20% of its shares at $123.90, and the two signed a marketing agreement that took effect at once, whether or not the merger closed. The deal was the largest in a wave that included SmithKline Beckman's merger with Beecham and Eastman Kodak's purchase of Sterling Drug. Shareholders of both companies approved it on 3 October 1989, when it was valued at $12.5bn; Bristol-Myers' Richard Gelb became chairman and chief executive and Squibb's Richard Furlaud president. One analyst judged that Squibb had "captured the bulk of the benefits of combination".
What it left behind
In the decades that followed, Bristol-Myers Squibb took the diversified company apart. Capoten lost US market exclusivity in February 1996. Clairol went to Procter & Gamble for $4.95bn and Zimmer was spun off, both in 2001; the infant-nutrition business Mead Johnson was split off in 2009 and its European consumer-health business, UPSA, was sold to Taisho in 2019. Along the way came an accounting scandal over inflated 1999–2001 sales, settled for $150m. Growth was bought instead: Medarex in 2009, Celgene for $74bn in 2019 and Karuna Therapeutics for $14bn in 2024. By 2025 Eliquis and Opdivo supplied about half its revenue, and the former Squibb site at Lawrence, New Jersey, remained one of its main research centres. Pairing a one-drug company with a diversified partner bought time rather than a pipeline; the value in the end came from the acquisitions and disposals that followed.