Good morning and welcome to FirstFT. In today’s newsletter:

• AstraZeneca and Bristol Myers Squibb discuss $400bn tie-up

• Morocco counts its dead and missing after mass swim to Ceuta

• How Indonesia’s free meals scheme fell into crisis

UK drugmaker AstraZeneca is in talks to combine with US rival Bristol Myers Squibb in a deal that would create one of the world’s biggest pharmaceutical groups valued at nearly $400bn.

What to know: The companies have held discussions about a tie-up in recent months, according to people familiar with the matter. The talks could yield a deal in the near future but may be delayed or fall apart, the people said.

AstraZeneca, the UK’s second most valuable listed company, has a market valuation of about £196bn while BMS is worth roughly $133bn. A combination of the two would be among the biggest pharmaceutical deals of all time, and propel AstraZeneca to become the world’s fourth-largest drugmaker by market capitalisation.

What’s at stake? A deal by longtime AstraZeneca chief executive Sir Pascal Soriot would extend the drugmaker’s footprint in the US market and intensify British fears of the UK’s largest companies pivoting away from the country. The talks come after AstraZeneca in June elevated the FTSE 100 company’s New York listing, in a blow to the London stock market.

Any cross-border deal could be contentious. It is likely to face political pushback in the UK over the possibility of AstraZeneca using the deal to redomicile in the US. Any combination would come under tough antitrust scrutiny given both have large cancer divisions.

Read more about the potential megadeal.

Here’s what else I’m keeping tabs on today:

• Economic data: Manufacturing PMI readings are due for China, Japan, South Korea, Taiwan and other Asian economies. Vietnam and Indonesia report July inflation data.

• Results: Nissan and Mitsubishi report first-quarter earnings.

Five more top stories

1. The death toll from the mass crossing of migrants from Morocco into Ceuta rose to 72 yesterday, according to Spanish authorities. Questions swirled about whether the deadly crossing had been triggered as a political ploy, while many Moroccan families were left bereft or terrified that their children were among the dead. Malaika Kanaaneh Tapper reports from the border town of Fnideq.

2. US companies are off to a blistering start in second-quarter earnings season, reporting double-digit profit growth despite higher energy costs, elevated interest rates and cautious spending by consumers. S&P 500 groups are on track to notch up 47.4 per cent year-on-year earnings growth for the quarter, FactSet data shows, their strongest results in five years.

3. China’s venture capital firms are rushing to raise new funds and capitalise on investors’ renewed enthusiasm for the country’s technology sector after three years of record-low fundraising. Investors described backing Chinese AI as a “hedge” against US market bets, given Chinese companies had been competing aggressively on cost and offering cheaper access to models.

4. Iranian diplomats said Tehran was close to reaching a new arrangement with Oman to manage shipping through the Strait of Hormuz, a deal that is deemed critical to preventing the US-Iran war from escalating. A day earlier, Donald Trump said he had decided not to push ahead with a fresh assault on Iran after Gulf allies asked Washington to hold off.

5. Apple has restricted the number of potentially dangerous software bugs researchers can submit to its internal security team. The Cupertino-based tech giant told the FT it had moved in June to limit the high volume of requests it was receiving, with its review system coming under pressure from “AI slop” reports that can hallucinate security risks in its software.

Indonesia’s free meals scheme in crisis

Indonesian President Prabowo Subianto took power in 2024 with a bold and simple pledge to deliver free school meals for every child — a goal that seemed unimpeachably laudable for a nation with widespread malnutrition. But more than 18 months later, Prabowo’s promise has proved far less healthy than he hoped for his government, the country’s finances and even for many of its intended beneficiaries. Here’s how it went so wrong.

We’re also reading . . . 

• Hong Kong club spat: Members of an exclusive club have complained to the city’s government as part of a bitter dispute that threatens their ability to get a table at lunchtime.

• India’s ‘cockroach’ movement: The campaign Abhijeet Dipke started online while completing a master’s degree galvanised millions to take to the streets.

• Bangladeshi politics: The country’s future depends on the military distancing itself from the economy and politics, writes Nazmul Ahasan.

Chart of the day

The Magnificent Seven tech stocks are no longer magnificent. The once all-conquering companies that dominated the US capital markets — Nvidia, Meta, Apple, Microsoft, Alphabet, Amazon and Tesla — have lost their lustre after shedding more than $2tn of market value in June.

Take a break from the news . . . 

The new film Tony dramatises Anthony Bourdain’s origin story as a young man in the chaotic, dope-fuelled world of the restaurant kitchen one 1970s summer on Cape Cod. But the real story lies in how Bourdain transformed our view of restaurant culture, writes Jay Rayner.