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Moody’s reviews Abbott Laboratories
Moody's Investors Service said it placed Abbott Laboratories' A2 senior unsecured and Prime-1 short-term ratings on review for downgrade.
This follows the news that the company signed a definitive agreement to acquire Alere, Inc. for $8.4 billion, including Alere's $2.6 billion of existing debt.
Abbott plans to fund this transaction with incremental debt, which will double its current gross debt levels. Abbott will increase its pro-forma debt/EBITDA to an estimated 3.9 times from current levels of about 2.1 times or 2.45 times (excluding EBITDA from the branded generic drug business divested to Mylan).
"Abbott is taking on significant leverage for a non-transformative transaction," Moody's senior credit officer Diana Lee said in a news release.
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