5 Merger Arbitrage Opportunities in 2023

3. Pfizer Inc. (NYSE:PFE)’s $43B Acquisition of Seagen Inc. (NASDAQ:SGEN)

Consideration: $229 a share
Spread: 16.8%
Main Risk: Regulatory Scrutiny

After amassing billions of dollars on the sale of Covid 19 vaccines, Pfizer Inc. (NYSE:PFE) has moved to strengthen its drug portfolio with a $43 billion acquisition bid for Seagen Inc. (NASDAQ:SGEN). Given that Seagen stockholders have approved the acquisition bid, it would represent Pfizer’s biggest acquisition since acquiring Wyeth for $68 billion in 2009 on closing.

With the acquisition, Pfizer Inc. (NYSE:PFE) is to gain access to vital cancer treatments. Consequently, the deal has already attracted regulatory scrutiny, which could see its closing delayed.

Pfizer’s $43 billion deal translates to $229 a share. Consequently, it represents an arbitrage spread of $33 or 16.8%, as Seagen Inc. (NASDAQ:SGEN) is trading at about $196 a share.

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