(Reuters) -The Wall Street Journal reported on Wednesday that drug company Merck & Co. is in advanced talks to buy cancer-focused biotech company Seagen Inc. The deal could be worth about $40 billion or more.
The companies are talking about a price for Seagen above $200 per share, the report said, citing people with knowledge of the situation. (https://on.wsj.com/3uu3tMa)
Refinitiv data shows that Seagen has a market capitalization of $32.24 billion based on the closing price of its shares on Wednesday, which was $175.
Seagen didn’t say anything about the report, and Merck didn’t answer Reuters’ request for a comment right away after business hours.
A report from the WSJ said that Merck and Seagen want to make a deal on or before July 28, when Merck will report its earnings for the second quarter. The deal has been talked about for a while. Last month, the Journal was the first to report on it.
In June, analysts at BMO Capital said there is “little doubt” that Seagen will be good for Merck’s long-term growth, but they were worried about the increased attention from regulators.
Analysts said it was clear that Merck would need to find new ways to make money after its best-selling cancer drug Keytruda lost its exclusivity in late 2028.
The deal talks are happening at a time when several big corporate deals have been put on hold this year. This is because a drop in the stock market hurts the value of companies, and rising borrowing costs make it more expensive and harder to get financing for deals.
After months of talks, Kohl’s (NYSE: KSS), a chain of department stores in the United States, called off its sale to Franchise Group (NASDAQ: FRG) last week, citing falling markets and hard financing conditions.
Walgreens Boots Alliance (NASDAQ: WBA) gave up on its plan to sell its UK pharmacy chain Boots in June, saying that the turmoil in the world’s financial markets made it impossible for a third party to make a good offer.
In Britain, the $8.36 billion takeover of supermarket chain Morrisons by U.S. buyout fund CD & R hit a snag because it took longer than expected to get $6.6 billion in debt to pay for the deal.
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