Sun Pharma Considers Financing Options for Proposed $12 Billion Organon Acquisition

Sun Pharmaceutical Industries Eyes Multiple Financing Options for Organon Acquisition

Global lenders to Sun Pharmaceutical Industries Ltd. are weighing multiple financing options for its proposed $12 billion acquisition of New York-listed healthcare company Organon & Co. According to people familiar with the matter, the Indian drugmaker is considering seeking consent from Organon bondholders to swap their holdings into Sun Pharma debt.

As part of the financing plan, Sun Pharma is working on a potential euro-denominated bond that could carry a credit rating one to two notches higher than the one assigned to Organon before the proposed merger. Additionally, the company is planning to raise as much as $3 billion to $4 billion in offshore loans, which would be part of the final funding package.

The discussions highlight the scale of the deal, which would rank among the largest outbound acquisitions by an Indian drugmaker and aims to secure funding while preserving Sun Pharma's credit profile. The latest funding proposal may replace an earlier bridge loan facility that Sun Pharma was seeking.

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At least three banks - Mitsubishi UFJ Financial Group Inc., JPMorgan Chase & Co., and Citigroup Inc. - had committed to provide initial funding through a bridge facility. However, the people familiar with the matter noted that the final funding could be a combination of all options.

In a presentation last month, Sun Pharma said it would use $2 billion to $2.5 billion from its cash reserves to help fund the acquisition. The deal is expected to get necessary approvals by December, according to the people.