S&P: Kappa Beheer on watch

Standard & Poor's said it placed its BB- long-term corporate credit rating on Kappa Beheer BV, a holding company in the Kappa Packaging group, on CreditWatch negative.

The B ratings on the various subordinated notes issued by the group were also placed on CreditWatch negative.

S&P said the rating actions follow the announcement by Kappa Packaging and Jefferson Smurfit group (B+/Watch Developing/--) that they are in preliminary discussions regarding a transaction that could lead to a combining of the two entities.

As the discussions are only at a preliminary stage and no details have yet been disclosed with regard to the final structure or financing of such a transaction, S&P said the rating outcome is still uncertain.

Furthermore, any potential transaction is likely to be subject to regulatory approval, as a combined group will have dominant market positions in certain markets, according to S&P.

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