S&P Global Ratings placed Express Scripts Holding Co.'s ratings, including its BBB+ corporate credit rating, on CreditWatch with developing implications.
The placement follows insurer Cigna Corp.'s announcement that it will acquire the pharmacy benefit manager in a deal valued at about $67 billion.
S&P said the transaction "has long-term strategic and competitive merits related to scale and business diversity," but that transaction risks are likely to outweigh its merits initially.
CreditWatch means S&P could raise or lower Express Scripts' ratings based on the acquisition's final terms. The agency also placed Cigna's ratings — which are higher than Express Scripts' — on CreditWatch, with negative implications. S&P plans to resolve the CreditWatch upon the deal's expected completion, which is expected to occur by Dec. 31.
Fitch Ratings placed Express Scripts' ratings on Negative Watch following the Cigna bid.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.
