S&P lowers Pfizer rating

S&P said it cut the ratings on Pfizer Inc. on the company’s announcement to divest its Upjohn segment.

S&P lowered Pfizer’s rating to AA- from AA, and the ratings will stay on CreditWatch with negative implications.

Upjohn represents about 20% of Pfizer’s revenues. Upjohn will merge with Mylan plc’s assets to form a new company. Pfizer shareholders will be the majority stakeholders in the new company.

In addition, Pfizer will get about $12 billion in proceeds from debt raised by the new company.

“We view this latest transaction as modestly negative to Pfizer's business strength, because it weakens therapeutic diversification and scale. This is compounded by the company's plans to divest its consumer health business. That said, we expect this divestiture will materially increase the company's organic revenue growth to levels above peers, and obviate the need for acquisitions to sustain revenue growth,” S&P said in a press release.

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