LONDON (ShareCast) - (Sharecast News) - AstraZeneca has approached Gilead Sciences of the US about a potential merger to create a $240bn drugmaker, according to a report.
Britain's biggest company by market value contacted Gilead informally in May to size up the US company's interest in a deal, Bloomberg reported. AstraZeneca did not set out any terms and the companies are not in formal talks, Bloomberg said.

Gilead has discussed the proposal with advisers but has made no decision on how to proceed. Bloomberg said Gilead was not interested in selling to a bigger competitor at the moment.

A deal would bring together two companies with hopes of supplying drugs to combat Covid-19. Gilead's remdesivir antiviral has shown signs of effectiveness in treating the disease and AstraZeneca is working with Oxford University on its vaccine.

Cit analysts were sceptical about the report and said a deal was unlikely to overcome political objections.

"Before even considering the strategic or financial merits of a transaction, we anticipate that the US administration would likely seek to block any potential acquisition of any major US biopharma currently or potentially involved in future pandemic therapeutic development," Citi analyst Andrew Baum said in a note.

"We see even greater political resistance from the UK government, given AZN's involvement with development of the Jenner Institute's SARS-CoV2 vaccine and commitments to ensuring first commercial supply to the UK."

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