S&P affirms Lafarge

Standard & Poor's said it affirmed its BBB/A-2 long- and short-term corporate credit ratings on Lafarge SA, following the company's announcement of a €8.8 billion acquisition of 100% of the capital of Orascom Cement.

The outlook is stable.

The agency said that the transaction is still subject to relevant regulatory and anti-trust agreements, to the approval of the shareholders of the target's parent, Orascom Construction Industries, and to the approval of Lafarge's shareholders as regards the planned reserved capital increase being part of the funding structure.

S&P said it considers the acquisition as neutral to Lafarge's business risk profile.

On the financial side, the significant equity portion of the €10.2 billion, including debt assumed, transaction and large planned asset sales in 2008-2009, together with the group's comfortable pre-transaction credit metrics, should, among other things, allow Lafarge to consistently maintain a financial profile in line with existing ratings, the agency noted.

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