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Business deals

Japan's MUFG extends $18bn loan to Bristol-Myers for megadeal

Megabank teams with partner Morgan Stanley to fund Celgene acquisition

The head office of MUFG Bank in Tokyo. The megabank is actively exploring deals overseas. (Photo by Akira Kodaka)

TOKYO -- MUFG Bank is lending about 2 trillion yen ($18.5 billion) to Bristol-Myers Squibb for its purchase of fellow U.S. biopharmaceutical company Celgene, in what will be the largest merger and acquisition financing provided by a Japanese company.

Morgan Stanley, the financial adviser for the acquisition announced Thursday, decided to work with its partner Mitsubishi UFJ Financial Group to provide a combined $33.5 billion. The loan is expected to have a maturity of a year or less.

Until now, the largest acquisition financing by a Japanese institution was MUFG Bank's roughly 1.4 trillion yen loan to Suntory Holdings for its purchase of spirits distiller Beam in 2014. Other major cases include the joint financing for Takeda Pharmaceutical's acquisition of Shire, and the up to 1 trillion yen bridge loan by Mizuho Bank to SoftBank Group for its acquisition of Arm Holdings.

This will be the first time a Japanese bank makes a loan in the 2 trillion yen range for an acquisition involving two foreign players. Japan's three largest banks are expected to pursue more financing deals for major acquisitions abroad as they strengthen their operations abroad. 

MUFG took stake in Morgan Stanley shortly after the 2008 global financial crisis, later turning the company into an equity-method affiliate. The two have also been partnering in business operations.

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