Pfizer to raise $31 billion for Seagen takeover in largest debt offering

According to a late Tuesday statement from the pharmaceutical company Pfizer Inc., it intends to raise $31 billion through its most extensive debt offering to finance its proposed acquisition of Seagen Inc.

The business agreed to pay $43 billion to purchase Seagen and its targeted cancer therapies in March as it braces for a sharp decline in COVID-19 sales and generic competition for several top-selling medications.

Rival Abbvie Inc. raised $30 billion in debt in 2019 to fund its $63 billion acquisition of Botox manufacturer Allergan (NYSE:AGN). The amount is more than twice the $13.5 billion in debt that Pfizer (NYSE:PFE) raised in 2009.

Pfizer has been investing heavily in research and acquisitions to offset the expected $17 billion revenue impact from top medicine patent expirations and a drop in COVID product demand by 2030.

The debt offering, comprising eight instalments, is anticipated to end on May 19. The Pfizer 10-year bonds’ yield to maturity would be 125 basis points higher than the benchmark risk-free U.S. 10-year Treasury.

As joint lead and book-running managers for the offering, BofA Securities, Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), and J.P. Morgan are participating.

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