Moody's revises Allergan outlook to negative

Moody's Investors Service said it revised the outlook on Allergan, Inc. to negative from stable and affirmed its A3 senior long-term rating following the announcement that Valeant Pharmaceuticals International, Inc. (Ba3 corporate family rating/B1 senior debt rating) has made an unsolicited offer to acquire Allergan for more than $40 billion.

The negative outlook reflects potential deterioration in Allergan's credit quality if it is acquired by Valeant and uncertainty created by the newly disclosed 9.7% ownership of Allergan by Pershing Square Capital Management LP, the agency said. Moody's warned that it could downgrade Allergan's ratings by multiple notches, likely to below investment grade, if the acquisition is consummated.

In the meantime, Allergan's A3 rating reflects the company's strong niche market positions, its consistent operating performance and its good product pipeline, Moody's said.

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