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Merck Is In Advanced Talks To Acquire Seagen In A Nearly $40 Billion Deal; Wall Street Journal

Merck Is In Advanced Talks To Acquire Seagen In A Nearly $40 Billion Deal; Wall Street Journal
Merck & Co is in early talks to acquire cancer-focused biotech company Seagen Inc in a transaction worth $40 billion or more, according to the Wall Street Journal on Wednesday.
According to persons familiar with the situation, the businesses are contemplating a price for Seagen that is higher than $200 per share. According to Refinitiv statistics, Seagen has a market capitalization of $32.24 billion as of Wednesday's closing share price of $175.
Seagen declined to comment on the allegation, and Merck did not reply immediately to a Reuters request for comment after hours.
Merck and Seagen are hoping to reach an agreement before Merck's second-quarter earnings announcement on July 28, according to the WSJ.
The deal, which was initially revealed by the Journal last month, has been in the works for some time.
Analysts at BMO Capital noted in June that there is "little doubt" about Seagen's role in Merck's long-term growth, but they are concerned about increased regulatory scrutiny.
According to the analysts, there is an obvious need for Merck to replace income after the expected loss of exclusivity for its blockbuster cancer medicine Keytruda in late 2028.
The talks come at a time when numerous large corporate transactions have been shelved this year as a drop in equity markets harms firm values and rising borrowing costs make deal funding more expensive and difficult to get.
After months of negotiations, U.S. department store major Kohl's called off its sale to Franchise Group last week, citing declining markets and challenging financing conditions.
Walgreens Boots Alliance abandoned its plan to sell the UK pharmacy brand Boots in June, claiming that no third party could make a sufficient offer due to the volatility in global financial markets.
In the United Kingdom, Morrisons' 7 billion-pound ($8.36 billion) takeover by US buyout fund CD&R hit a hitch due to a delay in acquiring $6.6 billion in debt to complete the transaction.

Christopher J. Mitchell

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