Standard&Poor's affirmed its triple-'A' long-term and 'A-1'-plus short-term ratings on Switzerland-based Nestlé S.A. on June 17, 2002. The outlook is negative. The affirmation followed the announcement by Nestlé, the world's largest food group, of the proposed merger of its U.S. ice-cream operations with Dreyer's Grand Ice Cream, Inc., a leading U.S. ice-cream company. The merger, which is subject to approval by the relevant competition authorities, would result in Nestlé's owning 67% of the combined company. The ratings affirmation reflects the significant strengthening of Nestlé's position in ice cream in the U.S.--the world's largest market in terms of per capita consumption--boosting its cash flow generation, with no immediate cash outflow. In addition, the buyout of Dreyer's minority shareholders, which
