Half-year report says Novartis repaid $11 billion Avidity loan
Key Facts
Novartis disclosures showed that proceeds from dollar-denominated bonds were used to repay an $11.0 billion bridge loan arranged in February 2026 to finance the acquisition of Avidity Biosciences. The company’s first-half 2026 report said the loan had been repaid, while Novartis had announced completion of the acquisition on February 27, 2026. The disclosures identify the financing of the Avidity deal and repayment of its bridge loan among the events of the first half of the year. As of June 30, 2026, the company’s net debt was $39.4 billion. Net debt was $21.9 billion on December 31, 2025, according to second-quarter results.
Novartis set the consideration for Avidity shareholders at $72.00 per share in cash and valued the company at about $12 billion on a fully diluted basis upon completion of the deal. The bridge loan was therefore tied to financing a major acquisition that was completed in February. The half-year report said dollar bond proceeds were used to repay the $11.0 billion loan. These figures provide context for the scale of financing that accompanied the deal and place the repayment within the management of its liabilities after the acquisition. Net debt, meanwhile, rose in the first half compared with the end of 2025.
The company attributed the increase in net debt primarily to cash flows related to mergers and acquisitions, dividends and share buybacks. In its cash flow breakdown, it said free cash flow was $8.9 billion in the first half of 2026. But that was offset by a net cash outflow of $15.3 billion for mergers and acquisitions, intangible asset transactions and other acquisitions. Novartis said those outflows exceeded free cash flow. This gap explains the financial context for net debt rising to $39.4 billion on June 30, compared with $21.9 billion at the end of December 2025.
In the second quarter alone, free cash flow was $5.6 billion, down 12% in U.S. dollars from the same period a year earlier. This quarterly reading adds to the first-half free cash flow total of $8.9 billion. In its results, the company compared first-half cash flow with cash spending related to acquisitions and intangible asset transactions, which amounted to $15.3 billion. Novartis had previously issued dollar bonds in November 2025, when it offered 7 tranches with a total value of $6.0 billion. This provides a documented precedent for the company’s activity in the dollar bond market.
On the acquisition front, Novartis announced completion of the Avidity Biosciences deal on February 27, 2026. The company said the cash consideration was $72.00 per share, valuing the company at about $12 billion on a fully diluted basis. The $11.0 billion bridge loan was arranged in February to finance the deal, then repaid using dollar bond proceeds, according to the half-year report. In second-quarter results remarks, Chief Executive Vas Narasimhan said: "We are on track to deliver several important data readouts in the second half, and remain on track to deliver our full-year guidance and medium-term outlook."