"AstraZeneca today announced an agreement under which AstraZeneca will acquire the entirety of Bristol-Myers Squibb's interests in the companies' diabetes alliance for an initial consideration of $2.7 billion on completion and up to $1.4 billion in regulatory, launch and sales-related payments," it said in a statement.
"AstraZeneca has also agreed to pay various sales-related royalty payments up until 2025. In addition, AstraZeneca may make payments up to $225 million when certain assets are subsequently transferred."
Following completion of the transaction, AstraZeneca will own intellectual property and global rights for the development, manufacture and commercialization of the diabetes business.
"Together with Bristol-Myers Squibb we concluded that consolidating ownership of the diabetes portfolio would benefit both companies and allow us to better serve the needs of diabetic patients," said AstraZeneca chief executive Pascal Soriot.
"Today's announcement reinforces AstraZeneca's long-term commitment to diabetes, a core strategic area for us and an important platform for returning AstraZeneca to growth."
London-listed AstraZeneca added that diabetes was a key focus for the company, particularly in emerging markets.
"Diabetes is rapidly becoming a global challenge of epidemic proportions that is expected to affect more than 550 million people by 2030," Soriot said.
"Much of this impact will be felt in emerging markets where AstraZeneca has a strong presence.
"In recent years we've worked with our alliance partners at Bristol-Myers Squibb to develop an innovative portfolio of non-insulin anti-diabetic medicines that help address the needs of these patients."