Merck KGaA Raises Funds with $4B Investment-Grade Bond Sale to Finance SpringWorks Acquisition

Merck KGaA is issuing around $4 billion of US investment-grade bonds to fund its $3.9 billion acquisition of SpringWorks Therapeutics. The deal is expected to be split into four parts, with the longest 10-year note yielding around 1.05 percentage points over Treasuries. Proceeds from the bond sale will be used to refinance the temporary debt put in place for the acquisition.

Merck KGaA, the German pharmaceutical and electronics conglomerate, has announced plans to issue around $4 billion of US investment-grade bonds to fund its $3.9 billion acquisition of SpringWorks Therapeutics Inc. [1]. The deal is expected to be structured in four parts, with maturities ranging from three to ten years. The longest 10-year note is anticipated to yield around 1.05 percentage points over US Treasury securities.

The proceeds from the bond sale will be used to refinance the temporary debt that Merck KGaA put in place for the acquisition. The company has engaged banks including Barclays Plc, BBVA SA, Bank of America Corp., JPMorgan Chase & Co., and Societe Generale SA to arrange calls with bond investors, starting on Monday, August 11, 2025 [1]. Representatives for JPMorgan, Bank of America, and Barclays declined to comment, while other firms were not immediately available for comment. A Merck KGaA representative was also not able to comment outside of European business hours.

Merck KGaA expects the acquisition to close in the second half of 2025. The deal underscores the premium investors are willing to pay for therapies targeting unmet medical needs in niche markets. SpringWorks Therapeutics' two FDA-approved gamma secretase inhibitors, OGSIVEO (nirogacestat) for desmoid tumors and GOMEKLI (mirdametinib) for neurofibromatosis type 1, highlight the strategic value of entering high-margin, high-growth therapeutic niches [2].

The bond sale comes soon after Merck KGaA lowered its full-year sales growth forecast, citing a weaker dollar and a slowdown in its electronics business. Despite the challenging market conditions, the acquisition of SpringWorks is seen as a strategic move to bolster Merck KGaA's rare disease portfolio, which aligns with broader industry trends and the growing global orphan drug market.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-11/merck-kgaa-is-said-to-plan-4-billion-bond-sale-to-fund-purchase
[2] https://www.ainvest.com/news/immunome-undervalued-gamma-secretase-inhibitor-pipeline-light-springworks-merck-acquisition-2508/