Sun Pharma is evaluating multiple financing strategies to fund its proposed $12 billion acquisition of Organon & Co., marking one of the largest outbound deals by an Indian drugmaker.

Key Highlights

• Sun Pharma evaluates multi-route financing including bonds, loans for $12 billion Organon acquisition deal.
• Global banks back funding as company aims to preserve credit profile while expanding international presence.

According to reports, the company is considering seeking consent from Organon’s bondholders to convert their holdings into Sun Pharma debt. In addition, the firm is exploring the issuance of euro-denominated bonds that could potentially secure a higher credit rating than Organon’s current rating prior to the merger.

Multiple Funding Avenues Under Consideration

Apart from bond restructuring and eurobond issuance, Sun Pharma is also planning to raise between $3 billion and $4 billion through offshore loans. The final financing structure is expected to be a mix of these instruments, aimed at balancing cost efficiency with credit stability.

The deal is likely to receive necessary regulatory approvals by December, sources indicated. The evolving funding strategy may replace an earlier bridge loan arrangement that the company had initially explored.

Also Read: Sun Pharmaceutical to Acquire US-based Organon in $11.75 Billion Deal

Several leading global financial institutions, including Mitsubishi UFJ Financial Group, JPMorgan Chase & Co., and Citigroup Inc., have already committed to underwriting the acquisition through an initial bridge financing facility.

Commenting on the development, K Balasubramanian, CEO of Citi India and Banking Head for the Indian subcontinent said, “Currently, three banks including Citi have underwritten the acquisition facility and will work closely with Sun over the coming months on key milestones, including finalising the long-term capital structure.”

Strategic Importance of the Acquisition

The acquisition of Organon is expected to significantly strengthen Sun Pharma’s global footprint, particularly in developed markets. The company had earlier indicated plans to deploy $2 billion to $2.5 billion from its internal cash reserves toward funding the transaction.

The structured financing approach reflects Sun Pharma’s intent to preserve its credit profile while executing a large-scale international expansion.