NEW YORK (AP) – Fitch Ratings said it is considering downgrading certain ratings for Johnson & Johnson, citing the company’s move to buy Swiss medical device maker Synthes Inc. for $21.3 billion.

Fitch said its ‘AAA’ ratings, the best possible, for the company’s issuer default, senior unsecured debt, and subordinated debt are all under review. The ratings apply to about $16.7 billion in debt.

Fitch said if J&J borrows too much of the purchase price for Synthes the ratings agency could downgrade it. Fitch will decide after it’s clear whether that will happen.

J&J is buying Synthes in part to boost its share of the market for surgical trauma equipment and orthopedic implants.

Synthes is based in West Chester, Pa., but has its global headquarters in Solothurn, Switzerland. J&J expects the deal to close in the first half of 2012.

Fitch said it believes the buyout is “strategically sound” and would likely benefit the Johnson & Johnson in the orthopedics market.

Date: April 29, 2011
Source: Associated Press