Morgan Stanley No Longer Financing Karo Deal Amid Volatility

Morgan Stanley is no longer involved in providing financing for KKR & Co.’s purchase of Swedish consumer-health company Karo Healthcare, according to people familiar with the matter.

Morgan Stanley is advising Karo’s owner EQT AB on the sale and had teamed up with Jefferies Financial Group Inc. to offer around €1.1 billion ($1.2 billion) staple financing to potential bidders.

Staple financing is pre-arranged funding used to facilitate an acquisition. While it doesn’t guarantee that the banks win the deal, as others could offer better pricing and terms, the staple is often used and the lenders offering it are ...