State Bank of India Plans $1bn Funding Commitment for Sun Pharma's Organon Deal

State Bank of India (SBIN) is preparing to join a consortium of global lenders financing Sun Pharmaceutical Industries' (SUNPHARMA) $12bn acquisition of Organon & Co (OGN), committing up to $1bn pending board approval, according to people familiar with the matter.

SBI, India's largest bank by assets, would join Citigroup (C), JPMorgan Chase (JPM) and Mitsubishi UFJ Financial Group as a key debt financier of Sun Pharma's agreed April deal to acquire the US-listed drugmaker — one of the largest outbound transactions by an Indian company.

The move would rank among the first significant acquisition financings involving a state-run lender since India's central bank in February permitted domestic banks to fund corporate takeovers. Local institutions had previously been barred from such activity due to regulatory and asset-quality concerns, leading many companies to rely on shadow lenders, foreign banks or capital markets.

SBI and Sun Pharma did not respond to requests for comment.

Global lenders to Sun Pharma were weighing multiple financing structures for the Organon acquisition, people familiar with the matter said last month.

SBI's participation underscores the growing appetite among state-owned banks to support overseas acquisitions by Indian companies, which have increasingly pursued foreign targets to gain access to new markets, products and technology. The bank formed a partnership with MUFG in March to explore mergers and acquisitions opportunities, and its chairman, Challa Sreenivasulu Setty, said in February that it was in talks with Japanese lenders to fund large-scale deals — part of a broader push by Japanese banks to expand their presence in India's nearly $4tn economy.