Sun Pharma Evaluates Multi-Route Funding Plan For $12 Billion Organon Acquisition

Sun Pharmaceutical Industries Ltd. is exploring several financing options for its proposed $12 billion acquisition of U.S.-listed healthcare company Organon & Co., according to people familiar with the matter.

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The company is considering a mix of offshore loans, bond refinancing, and internal cash reserves to fund the transaction. The proposed acquisition is among the largest overseas deals by an Indian pharmaceutical company.

According to people aware of the discussions, Sun Pharma is evaluating a proposal that would allow Organon bondholders to exchange their existing debt holdings for Sun Pharma-linked debt instruments after the merger process is completed.

The company is also working on a potential euro-denominated bond issue. Sources said the proposed bond could receive a credit rating one or two levels higher than Organon’s existing rating before the merger announcement.

Apart from bond market funding, Sun Pharma is planning to raise nearly $3 billion to $4 billion through offshore loans. The final financing structure is expected to include a combination of debt instruments and internal funding.

The acquisition is expected to receive regulatory and other approvals by December 2026, according to people familiar with the matter.

Banks Backing The Transaction

Global lenders are already involved in the financing process. According to sources, Mitsubishi UFJ Financial Group, JPMorgan Chase & Co., and Citigroup had earlier agreed to provide bridge financing support for the proposed transaction.

Citigroup India CEO and Banking Head for the Indian subcontinent, K Balasubramanian, said three banks, including Citi, have underwritten the acquisition facility and are working with Sun Pharma on the final long-term capital structure for the deal.

Sun Pharma, JPMorgan, and Mitsubishi UFJ Financial Group did not immediately respond to queries regarding the funding discussions.

Cash Reserves To Support Deal

In a presentation released last month, Sun Pharma said it plans to use nearly $2 billion to $2.5 billion from its own cash reserves for the acquisition.

The proposed transaction comes at a time when Indian pharmaceutical companies are increasing overseas expansion efforts through acquisitions and strategic investments.

Indian Markets Performance

Indian equity benchmarks ended lower in the previous trading session. The Sensex closed at 77,017.79, down 251.61 points, while the Nifty 50 settled at 24,032.80, down 86.50 points. Banking, information technology, and metal stocks remained under pressure during the session.

Shares of Sun Pharmaceutical Industries have remained in focus following reports around the proposed Organon acquisition and the company’s financing plans.

The proposed acquisition and related financing structure are expected to remain under market watch as the company moves toward regulatory approvals and final funding arrangements later this year.