S&P keeps HeidelbergCement on watch

Standard & Poor's said its BBB-/A-3 corporate credit ratings on HeidelbergCement AG and its BBB+/A-2 corporate credit ratings on Hanson plc remain on CreditWatch with negative implications following the announcement by HeidelbergCement to bid for Hanson.

The ratings were originally placed on CreditWatch with negative implications on May 4, the agency said.

"Although the acquisition is expected to be partially equity financed, credit measures will significantly deteriorate, which could lead to a lower rating for the combined entity," said S&P credit analyst Eve Greb.

"Pro forma the transaction, funds from operations to debt are expected to deteriorate to about 10%, but could significantly improve afterward through disposal proceeds."

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