Sanofi (SNY.US) Consumer Health Division's battle is heating up, with lenders preparing over 10 billion euros in funds to support the acquisition.

Notice that, as one of the most anticipated acquisitions of the year, banks and other lenders are preparing to provide over 10 billion euros (11.1 billion dollars) to support the acquisition of Sanofi's consumer health department, and the deal has now entered its final stage. Insiders revealed that some core banks have signed financing commitments for 7.5 to 7.8 billion euros of senior debt over the weekend to support the bid for this acquisition. They will also provide around 1.2 billion euros of revolving credit facilities. Private credit institutions are also providing approximately 1.5 to 2 billion euros of junior debt for the acquisition. The New York-based acquisition company Clayton Dubilier & Rice is competing with French rival PAI Partners to acquire a subsidiary of Sanofi, with bids due to close this month. Two sources familiar with the matter said that the former is advised by Citi Group, while the latter is advised by JPMorgan. They added that the debt packages supporting CD&R and PAI's bids are quite similar, including leveraged loans and high-yield bonds priced in euros and dollars to attract as many institutional investors' liquidity as possible. While Sanofi has not commented on the financing, a representative of the company reiterated that they are considering potential options for divesting the consumer business, including selling or listing it, with a decision possibly to be made in the coming months. Reports in July indicated that some bidders have suggested valuing the division as high as 15 billion euros. Banks are eager to provide financing for leveraged buyouts again, with as many as 15 banks vying for financing in the Sanofi acquisition. These types of transactions are among the most lucrative businesses in the financial sector, especially after the hope that debt costs are finally beginning to decrease following the first rate cut by the Federal Reserve in 4 years. However, many still have fresh memories of the risks involved: just two years ago, lenders suffered heavy losses in supporting large corporate acquisitions, ultimately burdened with billions of dollars of unsustainable "leverage debt." The total leverage provided by banks is likely to be six times the department's earnings, which is quite high by recent standards. If private credit is taken into account, this figure will rise to 7.5 times. Just over a year ago, the debt packages arranged by banks to support acquisitions were around four times the earnings. Bloomberg News previously reported that the New York-based acquisition company CD&R is also in talks with banks, hoping to provide backup leverage to fund part of the equity check. Backup leverage is a type of loan that an acquisition company can obtain to provide funds for a partial equity investment in a specific company.