S&P keeps Bemis on watch

Standard & Poor's said its ratings on Bemis Co. Inc. remain on CreditWatch with negative implications, where they were placed on April 28 when Bemis indicated it was engaged in due diligence on a possible acquisition.

S&P expects to lower the ratings to BBB/stable/A-2 from A/Watch negative/A-1 upon completion of the Alcan Packaging Food Americas acquisition.

The ratings on Bemis reflect its strong business position in the North American flexible packaging market, large percentage of sales to recession-resistant food end markets and technological leadership and innovation, coupled with prudent financial policies, relatively stable earnings and strong free cash generation, S&P said.

The agency believes the acquisition of the Alcan operations would solidify Bemis' strong business risk profile and explained that the downgrade, if it occurs, would reflect the significant increase in debt incurred in connection with the acquisition.

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