Warner Chilcott Ltd, a specialty drug maker, is acquiring Procter & Gamble Co's prescription drug business for about $3 billion, two sources familiar with the matter said on Sunday.


Procter & Gamble's corporate headquarters is seen in Cincinnati, Ohio, January 28, 2005. REUTERS/John Sommers II

A transaction may be announced as soon as Monday, said the sources who declined to be identified because the deal is not yet public.

Six lenders led by Bank of America Corp and JPMorgan Chase & Co will provide up to $4 billion of financing, including $1 billion to refinance Warner Chilcott debt, the sources said.

Other banks expected to take part in the financing include Credit Suisse, Citigroup Inc, Barclays PLC and Morgan Stanley, one of the sources said.

Neither Warner Chilcott nor Procter & Gamble were immediately available for comment.

In December, P&G said it would end new investments in pharmaceuticals, consider divesting its healthcare brands and focus on its health business on over-the-counter products such as Pepto Bismol and Prilosec.

P&G's prescription drugs include osteoporosis treatment Actonel and overactive bladder treatment Enablex.

P&G hired Goldman Sachs in February to help sell its prescription brands or find other ways to exit the business, sources told Reuters at the time.

In April, P&G Chairman A.G. Lafley said pressure from generic products was one motivation to sell the business.

Last month a source familiar with the situation said P&G was in talks with Warner Chilcott and several private equity firms, including Cerberus Capital Management LP, to sell the prescription drug business.

Analysts said in July that Warner Chilcott may have an advantage as a bidder since it could squeeze synergies and costs savings out of the acquisition.

Drugmaker Forest Laboratories Inc was also interested in the business, the Wall Street Journal reported.

Warner Chilcott, based in Rockaway, New Jersey, will run the business as a wholly-owned unit, the newspaper said.

The acquisition will be the largest involving a leveraged loan in 2009, the newspaper said, citing data from Dealogic. It said this suggests more healing in credit markets, and that Warner Chilcott can absorb the banking fees because interest rates remain historically low.