NY -- Standard&Poor's CreditWire 10/20/97 -- Standard&Poor's today lowered its ratings on B.A.T. Industries Plc and related entities (see list below) to single-'A'-minus/'A-2' from single-'A'-plus/'A-1' following the announcement of its intention to merge its financial services operations with Zurich Insurance Co. (rated double-'A'-plus/Watch, Negative) and thereby demerge its tobacco and financial services operations. The downgrade reflects the highly concentrated business profile of a demerged BAT with all sales and earnings coming from tobacco products with a large proportion of operating profits (about 47% in 1996) from its U.S. operations, partially offset by BAT's otherwise geographically diversified operations. BAT's business profile essentially becomes that of a one-product company which compares unfavorably to the well diversified business portfolio
