Sun Pharmaceutical Industries Ltd. is exploring financing structures for its potential $12 billion acquisition of New York-listed Organon, according to sources. The Indian drugmaker is considering a bondholder swap strategy and planning a euro-denominated bond issuance that could carry a higher credit rating than Organon's current debt. Global lenders are actively involved in structuring the complex financing arrangement for the pharmaceutical merger.

The proposed acquisition represents one of the largest cross-border deals in the pharmaceutical sector this year. Sources indicate Sun Pharma is working with multiple global banks to finalize the funding mix, which may include consent solicitation from existing Organon bondholders to exchange their securities for Sun Pharma debt instruments. The euro-denominated component could help diversify the financing base and potentially reduce overall borrowing costs.

A higher credit rating on the new euro bond could improve investor appetite for the transaction. The deal reflects continued consolidation in the pharmaceutical industry as companies pursue scale and pipeline diversification. Sun Pharma's ability to secure favorable financing terms will be critical given the substantial purchase price and current market volatility.

The financing structure could set precedent for future large-cap pharmaceutical M&A transactions. Bondholder consent will likely be a key hurdle to clear before the deal closes.