Versum Materials Inc. Ratings Placed On CreditWatch Positive On Acquisition By Merck

  • Merck KGaA has announced that it signed a definitive agreement to acquire Versum Materials Inc. for about $6.5 billion (including assumed debt).
  • We view the transaction as a credit positive for Versum, which is being acquired by a higher rated company.
  • We are placing all of our ratings on Versum, including the 'BB+' issuer credit rating, on CreditWatch with positive implications.
  • We plan to resolve the CreditWatch upon completion of the transaction.
NEW YORK (S&P Global Ratings) April 12, 2019--S&P Global Ratings today took the rating actions listed above. The CreditWatch placement follows the announcement that Merck (A/Stable/A-1) signed a definitive agreement to acquire Versum for about $6.5 billion. We expect the transaction to close by the end of 2019. We would likely raise the rating on Versum to equalize it with the rating on Merck, then withdraw all ratings on Versum assuming its debt is fully repaid upon close.
We expect to resolve the CreditWatch following the completion of the transaction. We will monitor developments related to the transaction, including receiving the necessary shareholder approvals and regulatory clearances. We expect that the transaction will be positive for Versum given the stronger investment-grade rating on Merck and its much larger scale. If the transaction goes through, we will likely raise the rating on Versum to equalize it with the 'A' rating on Merck. We will withdraw the ratings upon close and the debt paydown by Merck.
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