S & P lowers Merck ratings due to Millipore deal

Tue, 03/02/2010 - 10:17am
The Associated Press

Standard & Poor's Ratings Service has lowered two ratings for Germany's Merck KGaA after the company announced it will buy biotech equipment maker Millipore Corp.

S&P said Tuesday it lowered long-term corporate credit and senior unsecured debt ratings for the maker of pharmaceuticals and specialty chemicals to 'BBB+' from 'A-.' The new ratings remain investment grade.

The ratings service also reaffirmed its short-term rating of A-2. The outlook is stable.

Merck said Sunday it will buy Millipore in a deal valued at $7.2 billion that is expected to close later this year.

S&P said in a statement it anticipates that "Merck's debt protection metrics will be significantly weaker for the next three years."

S&P also said Tuesday it affirmed its 'BB+' corporate credit rating on Millipore, with a positive outlook. That rating will be withdrawn once the deal is completed.

"Approximately 90 (percent) of the company's sales are consumables, lending some stability to Millipore's top line," S&P said in a separate statement on the Billerica, Mass., company.

Ratings on Millipore's individual debt issues will be raised to Merck's level or will be withdrawn if Merck refinances them.


Share this Story

You may login with either your assigned username or your e-mail address.
The password field is case sensitive.