S&P: Baxalta on negative watch

Standard & Poor's said it placed its ratings on Baxalta Inc., including the BBB corporate credit rating and A-2 short-term corporate credit rating, on CreditWatch with negative implications pending the close of Shire plc's planned $32 billion acquisition of the biopharmaceutical company.

The proposed combination of biopharmaceutical companies creates a much larger biopharmaceutical player with a more diverse product portfolio and therapeutic focus.

“However, based on the announced terms of the deal, the combined entity would also be much more highly levered than Baxalta on a stand-alone basis, with estimated pro forma leverage of roughly above 4x, from Baxalta's current 2.2x range,” S&P credit analyst Arthur Wong said in a news release.

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