Merck headquarters in Rahway, New Jersey.
Merck & Co. is seeking to raise about $6 billion from an investment-grade bond sale to help finance its acquisition of Terns Pharmaceuticals Inc., according to people familiar with the matter.
Merck is selling the notes in as many as seven parts, according to a separate person with knowledge of the matter. The longest portion of the offering, a 30-year security, may yield about 1.05 percentage points above Treasuries, said the person, who asked not to be identified as the details are private.
The size of the bond hasn't been finalized and plans may change, according to people. Merck will use proceeds of the bond sale to refinance debt it incurred to help purchase Terns. Merck agreed to buy Terns for $6.7 billion in March, giving the multinational company access to a promising new leukemia treatment as it faces the patent expiration of its bestselling cancer drug.
Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are managing the sale. Representatives for Merck and Citigroup didn't immediately respond to requests for comment. BofA, Goldman, and JPMorgan declined to comment.
The notes are expected to be rated Aa3 by Moody's Ratings and A+ by S&P Global Ratings.
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