BMS and AstraZeneca to acquire Amylin Bristol-Myers Squibb is to take control of Amylin, the US biotech, in a complex $7bn joint deal with AstraZeneca that will consolidate the fast-growing market for diabetes medicines. In a two-stage deal, Amylin shareholders will receive $31 a share in cash from BMS totalling $5.3bn, marking a significant premium since reports circulated of bidder interest in the biotech, which in Byetta and Bydureon has two important marketed treatments for patients before they require insulin, as well as other experimental drugs. BMS will also assume debt and royalties payable to Amylin's existing partner Eli Lilly of for a further $1.7bn, but then fold the company into its joint venture with AstraZeneca, which will then pay half of the total $7bn. The acquisition, finalised late on Friday night, follows an auction between several large pharmaceutical groups which closed on Wednesday. Sanofi, Pfizer, Merck, Roche and Takeda, are understood to have looked at Amylin. Rather than bidding against each other, BMS and AZ resolved to strengthen their longstanding diabetes partnership and share the costs and benefits. AZ will pay $3.4bn to BMS, and is almost certain to subsequently exercise its rights to pay a further $135m to represent exactly half the total transaction cost, giving it equal governance rights over the joint venture. Lamberto Andreotti, BMS" chief executive, said: "We are pleased to be able to strengthen the portfolio we have built to help patients with diabetes ... The acquisition of Amylin by Bristol-Myers Squibb is also a unique way for Bristol-Myers Squibb and AstraZeneca to expand the alliance between the two companies, and it demonstrates Bristol-Myers Squibb's innovative and targeted approach to partnerships and business development. Simon Lowth, AZ's interim chief executive, said: "This is a compelling proposition that will have an immediate positive impact on revenues and is fully in line with our stated partnering strategy to enhance top-line growth and strengthen our late-stage pipeline ... The combined development, regulatory and commercial strengths of the AstraZeneca and Bristol-Myers Squibb alliance for diabetes provides an excellent platform to unlock the potential of Amylin's differentiated treatments for the benefit of patients worldwide and for our shareholders. AZ said the transaction would have no impact on its guidance range for core earnings per share in 2012, but would be dilutive to core and reported earnings per share in 2012 and 2013. Citi and Evercore advised BMS, Bank of America Merrill Lynch advised AstraZeneca, and Credit Suisse and Goldman Sachs advised Amylin.