S&P: Johnson & Johnson unaffected

Standard & Poor's said its ratings on Johnson & Johnson (AAA/stable/A-1+) are unaffected by the company's proposed purchase of Pfizer Inc.'s (AAA/stable/A-1+) consumer products businesses for $16.6 billion in cash.

Pro forma for the acquisition, credit measures will remain exceptionally strong, with funds from operations to total debt in excess of 370% and total debt to EBITDA under 0.3 times, the agency said, adding that cash flow after capital spending and dividends is expected to exceed $6 billion in 2006, providing ample liquidity to complete a $5 billion share repurchase program.

The agency said that although the price as a multiple of EBITDA is exceptionally high at 22 times, the assets purchased include such stable and well-recognized brands as Listerine oral care products and Sudafed cold care products, noting that these brands should continue to perform well given the company's long and successful track record marketing consumer health products.

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