Research Update: French Chemical Group Arkema Outlook Revised To Positive On Improved Portfolio Diversification; Affirmed At 'BBB+/A-2'

France-based Arkema's plans to acquire a 54% stake in PI Advanced Materials, based on a €728 million enterprise value, combined with the company's continued portfolio repositioning from organic and external growth, including for the acquisition of Ashland in 2022 and divestments, supports our view of improving business prospects and the strengthening quality of earnings. We expect Arkema to report an S&P Global Ratings-adjusted funds from operations to debt of 46%-50% this year and 55%-60% in 2024, considering the increase in net debt and earnings normalization in the more challenging macroeconomic environment, following record-high results in 2022. We therefore revised our outlook on Arkema to positive from stable, and affirmed the 'BBB+/A-2' issuer credit ratings. We also affirmed our 'BBB+' ratings

...- France-based Arkema's plans to acquire a 54% stake in PI Advanced Materials, based on a 728 million enterprise value, combined with the company's continued portfolio repositioning from organic and external growth, including for the acquisition of Ashland in 2022 and divestments, supports our view of improving business prospects and the strengthening quality of earnings. - We expect Arkema to report an S&P Global Ratings-adjusted funds from operations to debt of 46%-50% this year and 55%-60% in 2024, considering the increase in net debt and earnings normalization in the more challenging macroeconomic environment, following record-high results in 2022. - We therefore revised our outlook on Arkema to positive from stable, and affirmed the '###+/A-2' issuer credit ratings. We also affirmed our '###+' ratings on Arkema's senior debt and the '###-' on its hybrid instruments. - The positive outlook reflects a one-in-three likelihood of an upgrade within the next 12-24 months if we believe Arkema...

Research Update