New York: New York-based pharmaceutical giant Bristol-Myers Squibb Co. on Thursday announced it would buy US biotech firm Celgene Corp. in a $74 billion cash-and-stock deal, instantly creating a rival to the world’s largest drug makers. The merger plans underscored the companies’ efforts to diversify in the field of cancer treatments, with investors in recent months questioning their growth prospects.

In the deal, Bristol-Meyers Squibb gains Celgene’s blockbuster Revlimid treatment for multiple myeloma. The companies said the new entity would also offer nine products with more than $1 billion in annual sales.

Bristol-Myers Squibb chairman and chief executive, Giovanni Caforio, said that in a statement the combined companies would also enjoy “a deep and broad pipeline that will drive sustainable growth".

They also pointed to oncology, immunology, inflammation and cardiovascular disease as important growth areas. “We will also benefit from an expanded early- and late-stage pipeline that includes six expected near-term product launches," Caforio said in the statement.

Both companies had been the subject of merger speculation, with investors saying Bristol-Meyers’ big seller Opdivo, a cancer medication, had lost market share to rival Merck.

Celgene meanwhile faced the prospect of mounting competition from copycat drugs as patents begin to expire, according to Bloomberg. Celgene’s Revlimid had sales expected to top $10 billion, according to the news agency.

Caforio will continue to serve in his chief roles while two members of Celgene’s board will hold spots on Bristol-Myers Squibb’s board of directors.

Speaking ahead of the announcement, Jeffries trading specialist Jared Holz told Bloomberg that Celgene had been “one of the most disappointing stories" among major healthcare firms, with some of its most promising drugs in development not due to be available before 2020.

Under the deal, Bristol-Myers shareholders will own about 69% of the new pharmaceutical giant, while Celgene Shareholders will receive one Bristol-Meyers share and $50 per share of Celgene.

The companies expect to close the deal in the third quarter of this year, with earnings per share at Bristol-Meyers Squibb swelling by 40% in the first full year.

Shares in Bristol-Myers plunged more than 10% at the open on Wall Street while the New Jersey-based Celgene soared more than 30%. Bristol-Meyers is due to report fourth-quarter results later this month.

Celgene in January of last year announced the acquisition of Seattle-based Juno Therapeutics, which developed treatments for lymphoma, and the blood disease biotech firm Impact Biomedicines, for a total of $16 billion.

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