Fitch puts McKesson on watch

Fitch Ratings said it placed the long-term ratings of McKesson Corp., including the A- long-term issuer default rating, on Rating Watch negative.

The action follows news that the company intends to acquire Celesio AG, including the voluntary tender for its publicly held stock, in a deal valued at about $8.3 billion.

The proposed Celesio deal is strategically sound, but its funding is likely to significantly increase the company's debt load, Fitch said.

Debt leverage is already elevated relative to the A- ratings following the PSS World Medical, Inc. deal earlier in 2013, the agency said.

The company and its peers maintain stable operating profiles and consistent cash generation, owing to steady pharmaceutical demand and the oligopolistic U.S. drug distribution market, Fitch said.

The agency said it sees the European drug channel as somewhat less stable and efficient and generally higher risk than the U.S. market.

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