S&P: Rockwood on negative watch

Standard & Poor's said it placed its ratings for Rockwood Specialties Group Inc. on CreditWatch with negative implications, citing the company's announcement of a sizable acquisition.

Ratings placed on watch include the company's B+ corporate and senior secured bank loan ratings and B- senior subordinated notes rating.

The CreditWatch placement follows the company's announcement of an agreement to acquire four businesses of Dynamit Nobel, the chemicals unit of Mg Technologies AG. Rockwood will acquire the Sachtleben, Chemetall, CeramTec and DNES Custom Synthesis divisions of Dynamit Nobel for about $2.4 billion. The four divisions had sales of about $1.6 billion in 2003.

The transaction is subject to regulatory reviews and shareholder approval and is expected to close in the second half of 2004.

S&P said the proposed combination would be a significant strategic initiative for Rockwood, as it would broaden the company's specialty chemicals product portfolio and technology base, and expand the company's end market and geographic diversification. On a pro forma basis, Rockwood will have sales of almost $2.5 billion.

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