S&P's Abbott ratings unaffected

Standard & Poor's said the revised terms of Abbott Laboratories' (AA/stable/A-1+) agreement to purchase the vascular businesses of Guidant Corp. (A-/positive watch/A-2) for $4.1 billion, if Boston Scientific Corp.'s (A/negative watch/A-1) $28 billion bid for Guidant is successful, will have no effect on S&P's rating or outlook for Abbott.

Although the revised terms suggest that Abbott will increase its borrowings to almost $10 billion, credit metrics should be only marginally depressed from where they were under the first agreement, the agency said.

If successful, the acquisition of Guidant's vascular businesses will restore the business diversity lost upon the spin-off of Hospira Inc. (BBB/positive) and Abbott would gain a wide range of related cardiac products. These businesses could vault the company to a number two market position, S&P predicted.

© 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.