Announcement • Mar 18

Bristol-Myers Squibb Company (NYSE:BMY) completed the acquisition of Karuna Therapeutics, Inc. (NasdaqGM:KRTX) from Capital International Investors, FMR LLC, The Vanguard Group, Inc., T. Rowe Price Group, Inc. (NasdaqGS:TROW) and others.

Bristol-Myers Squibb Company (NYSE:BMY) entered into a definitive merger agreement to acquire Karuna Therapeutics, Inc. (NasdaqGM:KRTX) from Capital International Investors, FMR LLC, The Vanguard Group, Inc., T. Rowe Price Group, Inc. (NasdaqGS:TROW) and others for $12.6 billion on December 22, 2023. Under the terms of the merger agreement, Bristol Myers Squibb will acquire all outstanding shares of Karuna common stock for $330.00 per share in cash, for a total equity value of $14.0 billion, or $12.7 billion net of estimated cash acquired. Bristol Myers Squibb expects to finance the acquisition with primarily new debt issuance. In February 2024, Bristol Myers Squibb entered into a $10 billion 364-day senior unsecured delayed draw term loan facility to provide bridge financing for the planned acquisition of Karuna. Upon termination of the Merger Agreement under certain specified circumstances, Karuna will be required to pay Bristol-Myers a termination fee of $490 million. The Merger Agreement also provides that Bristol-Myers will be required to pay Karuna a termination fee of $600 million under certain circumstances if the Merger Agreement is terminated pursuant to the terms of the Merger Agreement in connection with a failure to obtain certain required regulatory approvals. As of February 15, 2024, Shannon Jenkins a Karuna stockholder is suing the biotech, claiming that the company and its directors didn’t include or misrepresented key information in a proxy statement. The transaction is subject to customary closing conditions, including approval of Karuna stockholders, the waiting period (and any extension thereof) applicable to the consummation of the Merger under the HSR Act shall have expired or been earlier terminated and any required approvals thereunder shall have been obtained and receipt of required regulatory approvals. The transaction was unanimously approved by both the Bristol Myers Squibb and Karuna Boards of Directors. As of March 14, 2024, the waiting period under the HSR Act expired. The transaction is expected to close in the first half of 2024. As of March 18, 2024, Karuna shares have ceased trading on the Nasdaq Global Select Market and Karuna is now a wholly owned subsidiary of Bristol Myers Squibb (“BMS”). Gordon Dyal & Co. and Citi are serving as financial advisors to Bristol Myers Squibb, and Catherine J. Dargan, Michael J. Riella, Andrew (Drew) Fischer, Ingrid Rechtin, Robert Newman, Megan E. Woodford, Natalie M. Derzko, Sinan Utku, Marie A. Lavalleye, Michael K. Stern, Peter W.L. Bogaert, Winsome Cheung, Emily I. Leonard and George Jenkins of Covington & Burling LLP is serving as legal counsels. Goldman Sachs & Co. LLC is serving as exclusive financial advisor and fairness opinion provider to Karuna, and Eric M. Swedenburg, Jakob Rendtorff, Alan M. Klein, Jeannine McSweeney, Lori E. Lesser, Sara Y. Razi, Preston Miller, Vanessa K. Burrows and Andrew B. Purcell of Simpson Thacher & Bartlett LLP is serving as legal counsels. Okapi Partners acted as information agent to Karuna Therapeutics. Karuna has agreed to pay Goldman Sachs a transaction fee of approximately $117 million, $5 million of which became payable upon the announcement of the merger, and the remainder of which is contingent upon consummation of the merger. Okapi Partners LLC will be paid approximately $50,000, plus certain additional per-service fees, and will be reimbursed for certain fees and expenses for these and other advisory services. Bristol-Myers Squibb Company (NYSE:BMY) completed the acquisition of Karuna Therapeutics, Inc. (NasdaqGM:KRTX) from Capital International Investors, FMR LLC, The Vanguard Group, Inc., T. Rowe Price Group, Inc. (NasdaqGS:TROW) and others on March 18, 2024.

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Bristol-Myers Squibb Company (NYSE:BMY) completed the acquisition of Karuna Therapeutics, Inc. (NasdaqGM:KRTX) from Capital International Investors, FMR LLC, The Vanguard Group, Inc., T. Rowe Price Group, Inc. (NasdaqGS:TROW) and others.

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