Sun Pharma Secures $12 Billion Bridge Loan for Organon Acquisition

Sun Pharmaceutical Secures Funding for $12 Billion Acquisition

Sun Pharmaceutical Industries Ltd. is in the process of securing a short-term loan to finance its $12 billion acquisition of New York-listed healthcare company Organon & Co. The loan, which is expected to run for 12-18 months, will be provided by at least three banks: Mitsubishi UFJ Financial Group Inc., JPMorgan Chase & Co., and Citigroup Inc.

The financing for the deal highlights the scale of the acquisition, which is possibly one of the largest healthcare buys by an Indian company. It also showcases the increasing involvement of global banks in funding overseas deals. Notably, the timing of this financing coincides with a decline in foreign-currency borrowing by Indian firms. According to data compiled by Bloomberg, companies have raised about $3.6 billion so far this year, a significant drop from $8.6 billion in the same period last year.

As part of the broader financing structure, banks are exploring the possibility of refinancing Organon’s existing debt. This debt is expected to be down-sold to a group of lenders, with banks including Barclays Plc, BNP Paribas, and DBS Bank Ltd. likely taking on portions. However, nothing has been finalized yet.

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Sun Pharmaceutical has stated that it will use $2 billion to $2.5 billion from its cash reserves to help fund the deal. The remaining $9.25 billion to $9.75 billion will come from committed financing from banks. The company has not yet commented on the matter, and representatives from JPMorgan, BNP, DBS, and Barclays have also declined to comment. Citigroup has not responded to requests for comment.

| Comparison of Foreign-Currency Borrowing by Indian Firms | | --- | --- | | 2023 | 2022 | | $3.6 billion | $8.6 billion |

Note: The data is based on information compiled by Bloomberg and may not reflect the actual figures.