Moody's affirms Akzo Nobel

Moody's Investors Service said it affirmed the senior unsecured ratings of Akzo Nobel NV and its fully supported subsidiaries at A3/P-2 following the announcement that Akzo Nobel intends to separate its pharmaceutical business from its coatings/chemicals activities, subject to approval by an extraordinary meeting of shareholders and consultation with relevant employee representative bodies.

The outlook remains stable.

Moody's said the rating affirmation reflects the fact that the creation of two independent companies and minority listing of the Organon Biosciences through an initial public offering should have little effect on Akzo Nobel's consolidated internally generated cash flow while providing some additional financial flexibility to the group, proceeds raised from the demerger of Organon Biosciences should give Akzo financial flexibility and funding for the growth of its retained coatings and chemicals businesses and management's intention to keep Akzo Nobel's financial policies unchanged throughout the demerger process.

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