10 July 2008 18:39 [Source: ICIS news]
HOUSTON (ICIS news)--Standard & Poor's Ratings Services (S&P) said on Thursday that it may downgrade Dow Chemical, following the US company's announcement of its $18.8bn (€12bn) acquisition of Rohm and Haas.
S&P said it may also raise, lower or maintain its ratings for Rohm and Haas.
Dow's ratings will depend, in part, on the make-up of the financing for the deal, S&P said.
In addition, the ratings service will consider Dow's ability to close on its joint venture with Petrochemical Industries Co (PIC) of Kuwait, S&P said. In particular, the ratings service will consider how Dow uses the proceeds from the PIC joint venture.
However, even if the PIC deal does not close as expected, Dow's ratings will not likely fall below investment grade, S&P said.
Moreover, the acquisition will provide Dow with access to growing markets and to Rohm and Haas' portfolio of speciality chemicals, S&P said.
"In terms of product focus, the Rohm and Haas acquisition is consistent with Dow's efforts to bolster its market presence in performance chemicals and other differentiated chemical segments while selectively adding to strategic and low-cost positions in existing commodity categories, particularly through joint ventures," S&P said.
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