Pharmaceutical giant AstraZeneca had nearly £18billion wiped off its value as the market gave a thumbs-down to reports it was planning a mega-merger with US rival Bristol Myers Squibb (BMS).

But the FTSE 100 firm’s long-serving boss Pascal Soriot is said to be intent on pushing ahead with the merger, which could be announced as soon as today.

The deal will mostly be secured through stock rather than cash, according to people familiar with the matter, with investment bank Morgan Stanley said to be among advisers on the tie-up.

Soriot is also understood to have secured tentative backing from the Government by pledging to keep the newly enlarged company’s headquarters in Britain.

Astra declined to comment as its shares tumbled 9 per cent, or 1132p, to 11,500p, with analysts questioning whether a tie-up would be achievable – one saying they were ‘perplexed’ by the talks.

The stock market slide followed a report in the Financial Times that Astra and BMS had been discussing a merger for months, which, if completed, would create one of the world’s largest drugmakers with a value of nearly £300billion.

Astra declined to comment on the report. BMS did not respond to a request for comment. A tie-up would be one of the sector’s biggest mergers, although the news met with little optimism from industry analysts.

Michael Leuchten, analyst at broker Jefferies, said the reason to combine was ‘not yet clear’, noting that many of the drugs Astra could pick up through a merger could be ‘sourced elsewhere… particularly in China’.

‘Given the strength of Astra’s growth and innovation profile, we are a bit perplexed,’ he added, highlighting that, as both firms have large cancer drug portfolios, a merger would also have to clear regulatory barriers on both sides of the Atlantic.

Leuchten also noted that, with British firm Astra effectively buying one of America’s biggest drugmakers, a deal would carry a ‘political dimension’, saying: ‘Astra would effectively be a UK-based acquirer of one of America’s large pharmas at a time when US policymakers are focused on domestic manufacturing and strategic industries… whilst this could be a way to continue expanding its US footprint, it would likely need to be navigated to reduce friction.’

A mega-merger would also fuel concerns that Astra could move its main stock market listing to New York, in what would be a hammer blow to the London Stock Exchange.

Soriot has increased speculation by striking multi-billion-dollar deals in the US and has previously described Astra as a ‘very American company’.

It has also pushed ahead with licensing deals for new medicines in China.

News of a merger caught investors unawares, given Soriot said last week that the group did not ‘need mergers and acquisitions to deliver’ its 2030 sales target of $80bn.

A tie-up would, however, vindicate his decision to reject a £70billion offer from US rival Pfizer in 2014, when Astra was vulnerable to a buyout. 

Since then, he has proved instrumental in turning around its fortunes and driving its value to £196billion.