SBI Plans to Fund Sun Pharma’s $12 Billion Overseas Acquisition: Report

State Bank of India plans to join a group of global lenders in funding Sun Pharmaceutical Industries Ltd.’s $12 billion overseas acquisition, reported Bloomberg.

India’s largest lender by assets, State Bank of India (SBI), is considering a commitment of up to $1 billion to support Sun Pharma’s $12 billion acquisition of US-listed Organon & Co., according to people familiar with the matter who requested anonymity. The proposal is currently awaiting board approval.

If cleared, SBI would join Citigroup Inc., JPMorgan Chase & Co., and Mitsubishi UFJ Financial Group Inc. as a key debt financier for Sun Pharma’s landmark deal announced in April — one of the biggest outbound transactions ever undertaken by an Indian company, the report added.

Global lenders working with Sun Pharma have been evaluating several financing structures for its planned acquisition of Organon & Co., according to people familiar with the matter.

The scale of State Bank of India’s (SBI) potential funding highlights the growing willingness of India’s state-run banks to support outbound acquisitions, as domestic companies increasingly target overseas assets to gain access to new markets, products, and technology.

In March, SBI entered into a partnership with Mitsubishi UFJ Financial Group (MUFG) to explore merger and acquisition opportunities in India, further signaling its ambitions in cross-border deal financing.

This would mark one of the first major acquisition financings by a state-run bank since the Reserve Bank of India, in February, permitted local lenders to fund corporate takeovers. Previously, domestic banks were restricted from such activities due to regulatory and asset-quality concerns, forcing companies to turn to shadow lenders, foreign institutions, or capital markets for funding.

Both State Bank of India (SBI) and Sun Pharma declined to comment when contacted via email.