S&P cuts Fresenius Medical Care

S&P said it downgraded the ratings on Fresenius Medical Care AG & Co. and its notes to BBB- from BBB.

The downgrade follows Fresenius SE & Co. KGaA (FSE) reporting it plans to decouple itself from FMC.

“Our rating action reflects the announced decision on Feb. 21, 2023, by FSE, the legal owner of FMC, to initiate a change of FMC's legal form, thereby decoupling itself from its dialysis subsidiary. This follows FSE's original announcement on Feb. 9, 2023, that confirmed it was conducting such a review. We view the transition as a virtual certainty and upon execution–which is expected by end-2023–FSE will retain its sizable 32% stake in FMC. Although this still affords it an influential role in FMC's strategy-setting process, FSE will cease to have legal control over FMC's management team,” the agency said in a press release.

S&P noted both companies kept their finances separate and there are no guarantees of support.

The outlook is negative.

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