26 January 2004 21:51 [Source: ICIS news]
HOUSTON (CNI)--US commercial credit watchdog Moody's Investors Services on Monday placed the long-term senior unsecured debt ratings of Franco-German life sciences giant Aventis under review for possible downgrade.
New York City-based Moody's said its review was prompted by the $60bn (Euro47bn) hostile take-over offer by Paris-based rival Sanofi-Synthelabo, which seeks to acquire 100% of Aventis to create the world's third largest pharmaceutical firm.
Moody's said the ratings affected by its action include: A1 issuer rating; A1 for Euro MTN Program; Rhone-Poulenc Rorer A3 for preference stock; Rhone-Poulenc Commercial Finance A1 for Eurobonds guaranteed by Aventis; Rhone-Poulenc Overseas A3 for preference stock guaranteed by Aventis; and, HMR ASOP Trust (formerly Marion Merrel Dow ASOP Trust) A1 for notes guaranteed by Aventis.
Ratings affirmed were Aventis Prime-1 for short-term debt.
Moody's said the transaction, if completed, could bring business benefits that could be positive for Aventis but "that at the same time, the material cash amount of the transaction as well as the integration risk at the outset could weigh on Aventis existing ratings."
Added Moody's: "Also the unsolicited nature of the offer and its rejection by Aventis raises the possibility of alternative scenarios than a full merger with unknown consequences at this time."
Moody's said its review will look at the expected positive implications expected from Sanofi Synthelabo's offer including larger research and development (R&D) efforts, improved portfolio diversification and strengthened marketing capacity.
Aventis, headquartered in Strasbourg, France, is a world leader in pharmaceutical products.
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