IBM Downgraded by S&P as Deal Spree Clouds Ability to Cut Debt

(Bloomberg) — International Business Machines Corp. was downgraded by S&P Global Ratings because an acquisition spree adds doubt to the company’s timeline for reducing debt.S&P cut IBM one notch to A- with a stable outlook, according to a report Thursday. The credit rater expects IBM to pursue additional takeovers to bolster its hybrid cloud and artificial ingelligence capabilities. Coupled with the planned spinoff of its managed infrastructure services business, there’s uncertainty IBM can reduce leverage to a certain level in the next year or two, S&P said.Chief Executive Officer Arvind Krishna has been on a spending spree as he seeks to transform IBM into a more modern technology company, focusing on fast-growing markets like AI and cloud services after years of stagnation.The first step along that road was IBM’s purchase of Red Hat, completed in 2019 for $34 billion….

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