S&P Places FMC Corp. (FMC) on CreditWatch Negtive Following Plans to Acquire Cheminova

Standard & Poor's Ratings Services placed its 'A-' corporate credit and senior unsecured issue ratings on Philadelphia-based FMC Corp. (NYSE: FMC) on CreditWatch with negative implications, indicating we could lower the ratings upon completion of our review.

At the same time we affirmed our 'A-2' short-term corporate credit rating and 'A-2' commercial paper rating.

"The CreditWatch placement follows the announcement that FMC has entered into a definitive agreement to acquire Cheminova for about $1.8 billion," said Standard & Poor's credit analyst Seamus Ryan. We expect the transaction to close in early 2015. We will resolve the CreditWatch placement based on our view of the company's financial risk profile, which we expect to weaken once it increases leverage to fund this acquisition. Although the proceeds and timing of the planned Alkali Chemicals divestiture are uncertain at this time, we believe this transaction would partially offset the increase in leverage.

The ratings on FMC reflect our expectations that it will steadily improve the operating performance of its existing businesses and benefit from recent growth investments. We characterize FMC's business risk profile as "strong" and its financial risk profile as "intermediate". We do not expect this acquisition to affect the business risk profile, but we believe it could weaken the financial risk profile to "significant".

We expect to resolve the CreditWatch placement within the next few months once we complete our review of the company's permanent financing plans, pending further details about the planned divestiture of the Alkali Chemicals business. We could lower the ratings if we expect the company's financing plan to result in funds from operations to debt below 30%, pro forma for the acquisition of Cheminova.

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