(Dec 1): Merck & Co Inc is seeking to raise as much as US$8 billion through a corporate bond sale, with part of the proceeds expected to help fund its proposed acquisition of Cidara Therapeutics Inc, according to people with knowledge of the matter.
The pharmaceutical company is selling US dollar bonds is as many as eight parts, with maturities ranging from three to 40 years, according to a separate person familiar with the matter. Initial price discussions for the longest portion of the deal — a note maturing in 2065 — are for a premium of about 1.2 percentage points above Treasuries, the person added, asking not to be identified discussing private details.
Merck’s bond sale comes only a couple of weeks after it agreed to acquire Cidara, a biotech company developing a flu treatment, for roughly US$9.2 billion. The transaction is expected to close in the first quarter of 2026.
The offering adds to a borrowing spree that has pushed global bond issuance to a record of more than US$6 trillion this year, with companies taking advantage of strong investor appetite to fund everything from the boom in artificial intelligence projects to a revival in acquisitions.
Proceeds from Merck’s bond sale will be used to repay debt and fund a portion of the acquisition, among other uses, one of the people said. Six of the eight tranches will be subject to special mandatory redemption at 101% of the face value plus accrued interest if the Cidara deal isn’t completed by May 13, 2026, or if Merck terminates the merger agreement.
BNP Paribas SA, Citigroup Inc, Deutsche Bank AG and HSBC Holdings plc are managing the sale. The bonds are expected to be rated Aa3 by Moody’s Ratings and A+ by S&P Global Ratings.
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Citigroup declined to comment. Representatives for BNP Paribas, Deutsche Bank, HSBC and Merck didn’t immediately respond to requests for comments.
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