The new company could generate annual sales of $1 billion.

NEW YORK and SUMMIT, N.J. — In a deal worth $74 billion, Bristol-Myers Squibb announced today its plans to acquire Celgene Corporation. The transaction, according to Bristol-Myers, will create a leading focused specialty biopharma company well positioned to address the needs of patients with cancer, inflammatory and immunologic disease and cardiovascular disease through high-value innovative medicines and leading scientific capabilities. Together, the combined new entity will manufacture nine products that Bristol-Myers estimates will generate $1 billion in yearly sales.

According to the deal, Celgene shareholders will own 31% of the combined company while Bristol-Myers shareholders will own 69%.  Celgene shareholders will also receive one Bristol-Myers Squibb share and $50 in cash for each share of Celgene. Celgene shareholders will also receive one tradable Contingent Value Right (CVR) for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. The boards of both companies have approved the combination. Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders at closing is valued at $102.43 per Celgene share and one CVR.

“Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases,” said Giovanni Caforio, M.D., chairman and chief executive officer of Bristol-Myers Squibb. “As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches. Together, our pipeline holds significant promise for patients, allowing us to accelerate new options through a broader range of cutting-edge technologies and discovery platforms.”

Caforio added that Bristol-Myers is “impressed by what Celgene has accomplished for patients” and said he looks forward to welcoming Celgene employees to Bristol-Myers Squibb. “Our new company will continue the strong patient focus that is core to both companies’ missions, creating a shared organization with a goal of discovering, developing and delivering innovative medicines for patients with serious diseases. We are confident we will drive value for shareholders and create opportunities for employees.”

While the stock price of Bristol-Myers fell 14% in premarket trading, shares of Celgene jumped more than 30%. Though it has not received shareholder and regulatory approval, the deal is expected to be finalized in the third quarter.