TCL #50: A Billion Here, A Billion There

This week saw a flurry of billion-dollar deals across energy, biotech, and pharma. The US Department of Energy is reviving the Three Mile Island nuclear plant with a $1 billion loan, while TotalEnergies is investing $6 billion in Europe's electric future. Johnson & Johnson and Roche made significant moves in biotech and pharma, while Abbott Laboratories and AkzoNobel announced major acquisitions. The numbers are massive, and the stakes are high. Here's a look at the week's biggest deals.

Energy

The US Department of Energy has provided a $1 billion loan to Baltimore-based Constellation Energy to help finance the restart of the nuclear reactor at the Three Mile Island in Pennsylvania. The plant suffered a partial core meltdown in 1979 and its other undamaged reactor was closed in 2019 due to high cost of operation. Constellation Energy plans to revive the plant's undamaged reactor to generate electricity for Microsoft. Microsoft requires this power to support its artificial intelligence business and data centers, which have a high demand for continuous power. The agreement between the two companies includes a 20-year power purchase deal. The restart of the Three Mile Island is expected to add approximately 800 megawatts of power generation to the grid. The plant is set to resume in 2027 with Constellation expected to contribute about $1.6 billion.

Oil & Gas

TotalEnergies is significantly increasing its investment in electricity generation across Europe with a $6 billion deal. The company is acquiring a 50% stake in a portfolio of assets from Energeticky a Prumyslovy Holding (EPH) valued at $5.9 billion, a Czech Republic-based energy group that invests primarily in the energy sector. This move places TotalEnergies against rivals like Shell and BP, who are focusing more on fossil fuels. The company anticipates that electricity demand will grow faster than oil and gas demand, driven by EVs, heating, and AI data centers. The investment includes a mix of renewables, gas-fired power plants, and battery storage facilities across Europe. The company's power-generation business is expected to generate free cash flow by 2027, a year earlier than previously anticipated.

Biotech

Johnson & Johnson has agreed to acquire Halda Therapeutics, a clinical-stage biotechnology company, for $3.05 billion in cash. The acquisition, focused on Halda's proprietary Regulated Induced Proximity Targeting Chimera (RIPTAC) platform, aims to strengthen Johnson & Johnson's oncology pipeline. Halda's lead candidate, HLD-0915, is a once-daily prostate cancer treatment, which utilizes a novel approach to selectively target prostate cancer cells. The deal is anticipated to finalize in coming months, contingent upon regulatory approval and standard closing procedures.

Pharma

Roche has announced positive Phase III results from a major clinical trial for its experimental breast cancer drug, giredestrant. This oral medication is part of a new class of treatments known as selective estrogen receptor degraders (SERDs), designed to target estrogen receptors in cancer cells. The trial involved over 4,100 patients and demonstrated a statistically significant and clinically meaningful benefit compared to standard endocrine therapy. Roche plans to submit these results to health authorities to seek market approval globally. Analysts estimate giredestrant could achieve approximately $5 billion in sales, even with competition from AstraZeneca's camizestrant.

Diagnostics

Abbott Laboratories has agreed to acquire cancer diagnostics company Exact Sciences for approximately $21 billion. The acquisition will provide Abbott with access to Exact Sciences' cancer screening tests, such as Cologuard for colorectal cancer screening, and blood tests for early multi-cancer detection. Exact Sciences is projected to generate over $3 billion in revenue this year, and the acquisition will bring Abbott's total diagnostics sales to over $12 billion annually.

Paints & Coatings

AkzoNobel and Axalta Coating Systems have agreed to combine in an all-stock merger, creating a global paint company with a combined enterprise value of approximately $25 billion and combined revenues of $17 billion. AkzoNobel shareholders will own 55% of the new entity, with Axalta shareholders holding the remaining 45%. The merged company is anticipated to have dual headquarters in Amsterdam and Philadelphia. Artisan Partners, a significant investor in Axalta Coating Systems, has voiced strong opposition to the merger citing that the all-stock deal is not in the best interest of Axalta shareholders and has urged them to reject the transaction.

Packaging

Sealed Air, a packaging company, is being acquired by private-equity firm Clayton Dubilier & Rice (CD&R). The deal is valued at approximately $6.2 billion in cash and is anticipated to be finalized by mid-2026. The total enterprise value of the transaction is about $10.3 billion.