S&P upgrades Lafarge

Standard & Poor’s said it affirmed the BBB long-term and A-2 short-term corporate credit ratings on LafargeHolcim Ltd.

The agency also said it raised the ratings on Lafarge SA and its core subsidiary, Lafarge North America Inc., to BBB/A-2 from BB+/B.

The outlook is stable.

The ratings reflect the completion of Holcim Ltd.’s merger with Lafarge, S&P said. In May 2015, Holcim launched a public exchange offer for all outstanding Lafarge shares with new Holcim shares, the agency said.

Since the completion of the merger, parent company Holcim has been renamed LafargeHolcim Ltd., S&P said.

LafargeHolcim has an unrivalled asset portfolio in terms of size and geographic diversity, the agency said, along with a strong competitive position in virtually all key markets.

LafargeHolcim’s portfolio of about 90 countries with about 60% of sales coming from developing economies contributes to reducing the seasonality and cyclicality that characterizes the building-materials industry and allows for better capacity utilization, S&P said.

Key risks include the company’s high capital and energy intensity of the heavy building materials industry, the agency said, along with the competitive and fragmented nature of the business.

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