Merck Group Plans $40 Billion Bond Issuance for SpringWorks Acquisition

Merck Group, a prominent German pharmaceutical and chemical company, is planning to issue approximately 40 billion dollars in U.S. investment-grade bonds. The proceeds from this bond issuance are intended to finance the acquisition of SpringWorks Therapeutics, a biopharmaceutical company. The bond transaction is expected to be divided into up to four tranches, with maturities ranging from three to ten years. This strategic move aims to refinance the 39 billion dollars in temporary debt incurred for the acquisition of SpringWorks Therapeutics.

The bond issuance is part of Merck Group's broader financial strategy to secure the necessary funds for this significant acquisition, which is expected to enhance its position in the biopharmaceutical sector. The bond issuance is a critical step in Merck Group's efforts to strengthen its financial position and expand its capabilities in the biopharmaceutical industry. The company has already initiated discussions with multiple banks, including Barclays, Banco Santander, Bank of America, JPMorgan Chase, and Société Générale, to engage with bond investors starting from this week.

In April of this year, Merck Group officially announced its plan to acquire SpringWorks Therapeutics for 47 dollars per share in cash, valuing the transaction at 39 billion dollars. This acquisition represents one of Merck Group's largest investments in the healthcare sector in recent years and underscores its strategic focus on rare cancer treatments. The acquisition is anticipated to be completed in the second half of this year.

SpringWorks Therapeutics' core assets include two FDA-approved drugs. OGSIVEO® (nirogacestat) is the first systemic standard therapy for treating adult progressive desmoid tumors, a condition previously lacking effective treatments and reliant on surgery or radiation. GOMEKLI™ (mirdametinib) is the first drug approved for treating neurofibromatosis type 1-related plexiform neurofibromas in both adults and children aged two and above, filling a decades-long gap in this area.

Through this acquisition, Merck Group will not only add these two drugs to its portfolio but also gain direct access to the U.S. market, the world's largest pharmaceutical market. OGSIVEO® is already available in the U.S., while GOMEKLI™'s European marketing authorization application is currently under review by the European Medicines Agency, with an expected approval in the second quarter of 2025. Leveraging Merck Group's global commercialization network, these therapies are poised to accelerate their entry into regions such as Europe and Asia, benefiting a broader range of patients with rare cancers.