Fitch's Abbott ratings unaffected

Fitch Ratings said it does not expect the ratings and outlook for Abbott Laboratories (AA-/stable) to change in light of the company's intention to acquire Guidant Corp.'s vascular business for $3.8 billion in cash. Abbott also intends to provide Boston Scientific Corp. with a $700 million five-year loan and milestone payments of $500 million upon regulatory approvals of Guidant's drug-eluting stent program.

The proposed acquisition of Guidant's vascular intervention and endovascular solutions businesses coincides with Abbott's strategy of bolstering revenue and earnings growth through corporate acquisitions and strategic alliance activities, Fitch said.

Although the purchase is larger than all previous acquisitions, Fitch said Abbott's credit profile is characterized by solid liquidity and a history of successful acquisitions. The company had cash and short-term securities totaling $2.93 billion at the end of the third quarter of 2005, and free cash flow for the last 12 months ended Sept. 30 was $1.74 billion.

Fitch said it anticipates that Abbott's credit profile will remain consistent with the current rating category despite an expected increase in total debt necessary to complete the acquisition.

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