Private equity firm Clayton Dubilier & Rice (CD&R) is set to acquire Sanofi's (SNY, Financial) consumer health division, Opella, for approximately €15 billion ($16.4 billion). The transaction will be financed by a consortium of 22 banks, including Goldman Sachs and Citigroup.
Insiders report that loan agreements, amounting to €8.65 billion ($9.4 billion) in euro and dollar financing, will be finalized soon. Barclays, BNP Paribas, Citigroup, Goldman Sachs, Morgan Stanley, and Société Générale are among the seven banks designated as global coordinators.
The recent interest rate cut by the Federal Reserve has spurred optimism about reduced debt costs, encouraging banks to fund leveraged buyouts again. Such transactions are highly profitable, with the Opella acquisition being one of Europe's largest deals this year. Due to strong bank participation, financing fees are expected to decrease. Global coordinators, which play a pivotal role in bond sales to institutional investors, have the leverage to command higher fees. Of the seven banks, up to four might manage euro-denominated term loans, while others handle remaining bond sales.
Previously, banks had committed to financing a €5.45 billion term loan, priced at 350 basis points over Euribor for euros and 325 basis points over SOFR for dollars. Additionally, there is a €2 billion bridge financing for high-yield bonds, with an interest cap of 7.5% for euros and 8.5% for dollars. An additional €1.2 billion revolving credit facility will also be provided by the banks.
