Moody's could lower Clorox

Moody's Investors Service said it placed the Baa1 long-term senior unsecured ratings for the Clorox Co. under review for downgrade and affirmed the company's short term rating at Prime-2.

The action follows Clorox's announcement that it has signed a definitive agreement to acquire Burt's Bees for $925 million in cash. The affirmation of the company's Prime-2 rating assumes that the ratings are unlikely to be lowered more than one notch.

Moody's said it would review the strategic fit of Burt's Bees into Clorox's portfolio of other consumer products, the degree of integration risk, the structure of financing for the acquisition and the impact on Clorox's credit metrics and financial flexibility post closing.

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