Sun Pharmaceutical Industries is preparing to raise a multibillion debt financing backing a potential bid for US healthcare company Organon & Co in what could become the largest overseas acquisition by an Indian pharmaceutical company.
Citigroup, JP Morgan and MUFG are among the banks in talks to provide a bridge financing as India’s largest drugmaker puts together a binding offer at an enterprise value expected to top US$10bn.
Although Sun Pharma has not tapped the offshore loan market previously, the fundraising is expected to be straightforward. The borrower has a market capitalisation of Rs4.08trn (US$43.71bn) and generated Rs137.77bn in Ebitda for the nine months ended December 31. It had a cash balance of Rs122.57bn with a debt-to-equity ratio of 6.68% at the end of September, according to LSEG data.
Sun Pharma’s biggest acquisition so far was the US$4bn purchase of domestic rival Ranbaxy in March 2015. The all-stock transaction had an equity value of around US$3.2bn-equivalent and Sun Pharma assumed US$800m of debt.
Meanwhile, Organon posted revenues of US$6.2bn and adjusted Ebitda of US$1.91bn last year. The New York-listed company has a market capitalisation of US$2.46bn and had US$8.07bn in net debt at the end of 2025 representing 4.3x net leverage, which it expects to bring down to 4x by the end of this year.
Organon, which was spun off from Merck in 2021, has a track record in the loan market. In December 2024, it repriced a US$1.543bn term loan B due in May 2031 and amended and extended a €726m (US$857m) TLB to push the maturity out to December 2031 from June 2028.
The repricing shaved 25bp off the existing margin to 225bp over SOFR, while the A&E was priced at 275bp over Euribor with a 0% floor.
Organon, rated Ba2/BB (Moody’s/S&P), had earlier in May 2024 sold new senior secured and unsecured notes totalling US$1bn. The US$500m secured tranche was priced to yield 6.75%, while the US$500m unsecured bond issue landed at 7.875%.
The previous acquisition financing from India’s pharma sector was in March 2023 when Biocon Biologics, a subsidiary of India-listed pharmaceuticals company Biocon, closed a US$1.2bn loan backing the purchase of assets from US-based Viatris after attracting eight banks in syndication.
That five-year amortising sustainability-linked loan offered top-level all-in pricing of around 190bp based on an interest margin of 175bp over SOFR and a four-year average life.
In October 2024, Biocon printed an US$800m 6.67% high-yield bond issue to refinance the SLL and raised a US$320m five-year amortising loan secured against the physical assets in the US.