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* AstraZeneca ( AZN ) shares drop 6.2% after reported Bristol Myers

Squibb ( BMY ) merger talks

* FTSE 250 climbs 1%, outperforming blue-chip FTSE 100

* Clarkson jumps 7.8% after issuing upbeat full-year outlook

Aug 3 (Reuters) - The UK's FTSE 100 slipped on Monday as

AstraZeneca ( AZN ) shares fell on reports of a potential tie-up with

U.S. drugmaker Bristol Myers Squibb ( BMY ), while lower oil prices

dragged down energy heavyweights BP and Shell.

The blue-chip FTSE 100 index fell 0.10% to 10,857.49

points by 0931 GMT, while the mid-cap FTSE 250 rose

nearly 1% to 24,206.25 points.

* AstraZeneca ( AZN ) shares fell 6.2% as investors

questioned the logic of a merger with Bristol Myers Squibb ( BMY )

after reports they held preliminary talks about forming

one of the world's biggest drugmakers. The stock was the top

decliner in the FTSE 100.

* "The initial market reaction to the reports is highly

circumspect, reflecting understandable caution about the scale

of the deal. Major transactions of this kind often run into

difficulties around integration and matching up different

workplace cultures," said Russ Mould, investment director at AJ

Bell.

* Meanwhile, shares of BP fell 1.6% and Shell

dropped 0.8% as Brent crude prices fell about

5% after U.S. President Donald Trump held off a fresh attack on

Iran as he sought a quick deal that would halt Tehran's nuclear

ambitions and reopen the Strait of Hormuz.

* The broader British stock market and global stocks,

however, took comfort from the fall in oil prices.

* Rate-sensitive housebuilding stocks including those in

Vistry Group, Bellway ( BLWYF ) and Persimmon

climbed in the range of 4.8%-6.9% as UK bond yields fell on the

back of a retreat in oil prices.

* British manufacturing activity expanded for a ninth

straight month in July but at the slowest pace in four months,

according to S&P Global purchasing managers' data that points

to a renewed impact from the Iran war towards the end of last

month.

* Among other movers, UK shipping services firm Clarkson

rose 7.8%, leading gains across all London-listed

stocks, after issuing upbeat full-year outlook.