Moody's Sees Merck's (MRK) Divestiture Plans as Credit-Negative Event

Moody's Investors Service commented that Merck's (NYSE: MRK) announcement that it is contemplating a separation of its animal health or consumer products divisions is credit negative unless proceeds from any separations are invested back into the business, deployed for acquisitions or used to reduce debt. This is because such asset separations will reduce Merck's business diversity, earnings and cash flow.

There is no impact on Merck's existing ratings including the A1 senior unsecured (guaranteed debt), A2 senior unsecured (non-guaranteed debt), and the Prime-1 commercial paper program. The rating outlook is stable.

For additional information please see Moody's Issuer Comment on Merck available on www.moodys.com.

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