Moody's might drop Zimmer notes

Moody's Investors Service said it placed Zimmer Holdings, Inc.'s Baa1 senior unsecured note rating on review for downgrade following the company's announcement that it entered into a definitive agreement to acquire Biomet, Inc. for $13.35 billion in cash and stock.

The transaction is subject to regulatory approvals and Zimmer expects it to close in early 2015.

"Zimmer will take on a significant amount of debt with this transaction, and there are unique risks in bringing together two established franchises in orthopedic products. That said, we believe that the combined company's larger presence in hips and knees as well as potential synergies help support an investment grade profile," Moody's senior credit officer Diana Lee said in a news release.

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