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

(Reuters) -Pfizer Inc is planning to raise $31 billion through its largest debt offering to finance its proposed acquisition of Seagen Inc, the drugmaker said late on Tuesday.

The company struck a $43 billion deal in March to acquire Seagen and its targeted cancer therapies as it prepares for a steep fall in COVID-19 sales and generic competition for some top-selling drugs.

Rival Abbvie Inc had in 2019 made a $30 billion debt offering, which was used to finance its $63 billion buyout of Botox maker Allergan (NYSE:). The amount is more than double that of Pfizer (NYSE:)’s 2009 debt raise of $13.5 billion.

Pfizer has been pumping billions of dollars into research and acquisitions to mitigate an anticipated $17-billion hit to revenue by 2030 from patent expirations for top drugs and a decline in demand for COVID products.

The debt offering, which would be in eight tranches, is expected to close on May 19. Yield to maturity on Pfizer’s 10-year bonds would be 125 basis points higher than the benchmark risk-free U.S. 10-year Treasury. 

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