Merger Arbitrage Mondays – Johnson & Johnson To Buy Heart Pump Maker Abiomed

Merger activity remained steady last week with three new deals announced and five deals completed and one terminated. One of the three new deals announced was a potential deal in the works. DuPont (DD) received a “get out of jail” free card for its acquisition of Rogers Corporation (ROG) after Chinese regulators were taking their time to approve the deal. Considering Rogers earned $108 million in 2021, DuPont was paying a significant premium with its $5.2 billion deal announced on November 2, 2021. In a scenario reminiscent of Qualcomm’s (QCOM) decision to walk away from the NXP Semiconductors (NXPI) deal in mid-2018 because they could not get Chinese approval, the Rogers deal collapsed last week. The spread had already widened to nearly 21% before the deal failed and the stock dropped significantly after deal failure, closing last Friday at $105.62, a drop of 54% from the pre-failure price of $229.49. The stock is also trading well below its pre-acquisition price of $208.23 and below where it was trading five years ago. I started a small position in the company after failure and plan to write about the performance of failed deals in general and Rogers in specific for our next mid-month update....

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