S&P's Akzo Nobel ratings unaffected

Standard & Poor's said its ratings and outlook on Akzo Nobel NV (A-/stable/A-2) were unchanged after the group announced that it intends to fully separate, over the medium term, its coating and chemicals businesses from its pharmaceuticals and animal health activities. Initially, Akzo will only introduce minority shareholders in its newly separated Bioscience division and retain control over it, the agency said.

S&P said it expects the group will use part of the proceeds of such a spin-off to strengthen its balance sheet and retain a modest level of financial risk. Combined with Akzo's existing strength in coatings and specialty chemicals, this should enable the group to sustain the ratings.

Over the medium term, if the remainder of the Bioscience division is spun off, Akzo's business risk profile would weaken because, in S&P's view, the group would lose diversity and meaningful cash flow contributions.

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