Hedge Funds Reap Windfall as $10 Billion Hess Deal Bet Pays Off

Hedge fund managers including Citadel Advisors, Adage Capital Management and HBK Investments are reaping a windfall as the year’s largest pending corporate tie-up — Chevron Corp.’s $53 billion takeover of Hess Corp. — finally crosses the finish line.

Firms that specialize in merger arbitrage — essentially betting on a deal’s outcome — have long wagered that the acquisition would go through, despite a challenge from Exxon Mobil Corp. that threw the transaction into limbo for 20 months. The deal’s closure on Friday following a ruling by an arbitration court marks a huge victory to those who had stuck to their bets.