Fitch puts Allergan on positive watch

Fitch Ratings said it placed the BBB- ratings of Allergan plc and its subsidiaries on positive rating watch following news that the company will merge with Pfizer, Inc.

The ratings on positive watch include Allergan’s issuer default rating of BBB-; Warner Chilcott Ltd.’s issuer default rating of BBB-; Actavis Capital Sarl’s senior unsecured bank facilities rating of BBB-; Actavis Funding SCS’s senior unsecured notes rating of BBB-; Actavis WC 2 Sarl’s senior unsecured bank facility rating of BBB-; Actavis, Inc.’s issuer default rating of BBB- and senior unsecured notes rating of BBB-; Forest Laboratories, Inc.’s issuer default rating of BBB- and senior unsecured notes rating of BBB-; and Allergan, Inc.’s issuer default rating of BBB- and senior unsecured notes rating of BBB-.

Allergan is one of the largest pharmaceutical companies in the world with a diversified, growing and durable product portfolio generating double-digit sales growth and solid cash flows, Fitch said.

Though the timing the proposed transactions was not expected, Fitch said it views the divestiture of Allergan's generics business as strategically sound and sees strong strategic rationale in the proposed merger with Pfizer.

The credit profile of Allergan without the generics business will be strengthened by combining with Pfizer, which is rated several notches higher than Allergan, the agency said.

Fitch said it expects Allergan will contribute roughly $8.6 billion of EBITDA in 2016 and about $10 billion in 2017 to the combined company, Fitch added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.