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Bayer Obtains $14.2 Billion Syndicated Loan to Back Merck Deal

Bayer AG (BAYN) completed the syndication of a $14.2 billion loan backing the German drugmaker’s proposed acquisition of Merck & Co.’s consumer care business.

The deal, which comprises a $12.2 billion bridge facility and a $2 billion term loan, received commitments from 23 banks in syndication, according to a statement from BNP Paribas SA. The French bank coordinated the transaction with Bank of America Corp. and Mizuho Financial Group Inc.

Leverkusen-based Bayer is seeking to buy Merck’s unit as it shifts its focus to brand-name treatments that can be sold directly to consumers. The debt is the largest credit facility obtained in Europe this year, according to data compiled by Bloomberg.

The one-year bridge loan pays an initial interest margin of 25 basis points, or 0.25 percentage points, more than the London interbank offered rate, three people familiar with the deal said May 19. The four-year term facility offers a spread of 50 basis points, they said.

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Jennifer Joan Lee, Michael Shanahan

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