Bayer AG (BAYN) is marketing a $14.2 billion loan backing its proposed acquisition of Merck & Co.’s consumer business, according to three people familiar with the matter.
The German drugmaker is offering lenders a $12.2 billion one-year bridge loan to be refinanced with bonds and a $2 billion four-year term loan, said the people, who asked not to be identified because the terms are private.
Bayer is seeking to acquire the business as it shifts its focus to brand-name treatments that can be sold directly to consumers. The debt is the largest credit facility sought in Europe this year, according to data compiled by Bloomberg.
Guenter Forneck, a spokesman for the Leverkusen-based company, declined to comment on the financing.
The one-year loan pays an initial interest margin of 25 basis points, or 0.25 percentage points, more than the London interbank offered rate, the people said. The four-year facility pays a margin of 50 basis points more than Libor, they said.
Bank of America Corp., BNP Paribas SA and Mizuho Financial Group Inc. will arrange and market the facility, according to a May 6 statement. The company plans to refinance the bridge loan with senior and hybrid debt, it said.
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