Bonds, Loans and a Bold Leap: Inside Sun Pharma's Plan to Finance $12-Bn Organon Deal

Sun Pharmaceutical Industries is working with global lenders to piece together financing for its proposed $12 billion acquisition of the New Jersey-based Organon & Co, according to a Bloomberg report.

The funding structure being explored could include bond swaps, a euro-denominated bond issue and large offshore loans.

Deal at a Glance

Sun Pharma signed a definitive agreement to acquire Organon on April 26, in an all-cash deal valued at $11.75 billion, including debt. Under the terms, Sun Pharma will buy all outstanding shares of Organon at $14 per share, a premium of over 24% to the stock's closing price on April 24.

The deal is expected to receive all necessary regulatory approvals by December, the report added.

Once completed, the acquisition will be the largest overseas deal in Sun Pharma's history and is expected to push the company into the top 25 global pharmaceutical companies, with a combined revenue of $12.4 billion, according to CNBC.

How the Deal Will Be Financed

Sun Pharma is currently considering several routes to fund the acquisition.

One option involves seeking consent from Organon's existing bondholders to swap their holdings into Sun Pharma debt. The company is also exploring a potential euro-denominated bond that could carry a credit rating one to two notches higher than Organon's current rating.

Additionally, Sun Pharma is planning to raise between $3 billion and $4 billion through offshore loans. The final financing package is likely to be a combination of all these options.

These latest proposals may replace an earlier bridge loan facility the company had been working on. Three banks, Mitsubishi UFJ Financial Group, JPMorgan Chase & Co and Citigroup, had initially committed to providing funding through a bridge facility.

"Currently, three banks including Citi have underwritten the acquisition facility and will work with Sun extensively over the next few months on multiple aspects and milestones of the acquisition," K Balasubramanian, CEO of Citi India and Banking Head for the Indian Subcontinent, told Bloomberg.

What Sun Pharma Gains

The Organon deal opens several new doors for Sun Pharma. It marks the company's entry into the biosimilars segment and strengthens its women's health portfolio, two areas where it currently has limited presence.

The acquisition also supports Sun Pharma's broader strategy of expanding into higher-margin specialty medicines, including dermatology, oncology and obesity treatments, as revenues from its US generics business face pressure.

Beyond products, the deal gives Sun Pharma access to new geographies. "We have little presence in China; Organon will help the company establish it," the company's management said, as quoted by The Informist. Sun Pharma is also looking to enter ten new markets, including South Korea.

Managing Debt Post-Merger

Organon carried a debt of $8.6 billion and a cash balance of $574 million as of December 2025, with a net debt-to-EBITDA ratio of 4 times. Sun Pharma, by contrast, is currently net-cash positive. Following the merger, the combined entity's net debt-to-EBITDA ratio is expected to settle at 2.3 times. The management has reportedly expressed confidence in paying down debt quickly, noting that Organon's debt carries an interest rate of around 5.5%.

This is not the first time Sun Pharma has pursued a financially stressed acquisition. In 2007, it successfully took over Israeli research firm Taro Pharma, which was then listed in New York and in financial difficulty. In 2014, it bought Ranbaxy Laboratories, then facing regulatory action from the US Food and Drug Administration, from Japan's Daiichi Sankyo for around $3.2 billion. Organon marks Sun Pharma's sixth acquisition in the past 16 years.