Sun Pharma's Strategic $12 Billion Deal with Organon: Funding Plans Unveiled

Sun Pharma has finalized a significant $12 billion deal with Organon, aiming to finance the acquisition through a unique 'all-pocket' strategy. This approach combines loans, bonds, and cash reserves, allowing the company to maintain a balanced credit profile. Reports suggest plans for euro-denominated bonds and discussions with existing bondholders to convert holdings into new debt. Major global banks have committed to initial funding, with a shift towards a long-term financial structure anticipated. Sun Pharma's strategic use of its cash reserves aims to secure its financial standing while pursuing this monumental acquisition.

By Narendra Chaudhary May 6, 2026, 11:45 IST

Sun Pharma and Organon Strike a Major Deal

India's prominent pharmaceutical company, Sun Pharma, has successfully finalized a deal with the New York-listed healthcare firm, Organon & Co. The agreement involves raising approximately $12 billion, equivalent to around ₹1 lakh crore. To finance this substantial transaction, Sun Pharma is considering a unique 'all-pocket' strategy, which combines loans, bonds, and its cash reserves instead of relying solely on traditional funding methods.

Funding Strategy Details

According to reports, Sun Pharma is contemplating the 'all-pocket' approach to finance the deal. This strategy entails utilizing multiple funding sources simultaneously, including foreign loans, bond issues, and cash reserves. The company may also engage in discussions with existing bondholders of Organon to convert their holdings into new debt from Sun Pharma.

Future Plans for Bond Issuance

Media sources indicate that Sun Pharma is also working on plans to issue euro-denominated bonds. These bonds could potentially have a better credit rating than Organon's current rating, which would help attract investors. Additionally, Sun Pharma aims to raise between $3 to $4 billion through foreign loans.

Initial Funding Commitments

Previously, three major global banks—Mitsubishi UFJ Financial Group Inc., JPMorgan Chase & Co., and Citigroup Inc.—expressed their commitment to providing bridge loan facilities for initial funding. However, this bridge loan model may evolve into a more comprehensive and long-term funding structure. K. Balasubramanyam, CEO of Citi India, mentioned that the bank has already underwritten this acquisition and will collaborate with Sun Pharma in the coming months to work on its financial structuring, including finalizing a long-term capital structure. Sun Pharma has indicated that it plans to utilize between $2 to $2.5 billion from its cash reserves for this deal, aiming to maintain a balanced credit profile through a mix of debt and internal resources.