...RWN on Sika Acquisition: The Rating Watch Negative (RWN) reflects the uncertainty surrounding Compagnie de Saint-Gobain's deleveraging following the Sika acquisition and execution risk around the sale of Saint-Gobain's remaining packaging unit Verallia, which could offset the purchase consideration paid for Sika. Without the sale of Verallia, FFO adjusted net leverage is expected to reach around 3.8x in 2015, moderately lower than 3.9x as at end-2013. Saint-Gobain could delever to below our negative guidance of 3.5x as previously expected, following the divestment of Verallia, improved organic growth and a potential hybrid bond issue (benefiting from equity credit). Mix Improvements, Sizeable Synergies: Saint-Gobain's business profile will benefit from Sika's exposure to high-growth emerging markets, particularly in Asia, and its higher-margin, value-added product portfolio compared with the group. However, the economic interest is 16% and we view these benefits as limited. Management plans...
