Moody's cuts Abbott outlook to negative

Moody's Investors Service said it changed Abbott Laboratories' outlook to negative from stable, following the announcement that the company plans to acquire the pharmaceutical business of Solvay Group for €4.5 billion.

At the same time, Moody's said it affirmed Abbott's A1 long-term and Prime-1 short-term ratings.

The change in outlook reflects its concerns that the company may continue its more aggressive acquisition strategy and that Solvay could reduce Abbott's financial flexibility even if it is funded with balance sheet cash, the agency noted.

Abbott's debt levels have risen significantly since year end 2008 and already low cash coverage of debt could be much weaker post-close, the agency said.

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