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Swedish Match AB Ratings Placed On CreditWatch Positive On Acquisition Offer By Philip Morris International Inc.

    • Philip Morris International Inc. (PMI) announced on May 11, 2022 that it made a public cash offer of Swedish krona (SEK) 106 per share to fully acquire Swedish Match AB (SW). SW's board of directors recommended shareholders accept the offer.
    • We expect the transaction to close by the end of 2022, pending SW's shareholder approval, regulatory approvals, and other customary closing conditions. PMI's offer is conditional on share tender representing more than 90% of the total number of outstanding shares in SW.
    • We placed our 'BBB/A-2' ratings on Swedish Match and our 'BBB' rating on its debt on CreditWatch with positive implications, reflecting our view that the transaction could enhance the company's credit profile, given the acquisition by a higher-rated entity. We expect PMI to redeem or assume all SW's debt at close. We expect to resolve the CreditWatch placement as soon as we have clarity regarding the offer's acceptance.
    DUBLIN (S&P Global Ratings) May 13, 2022--S&P Global Ratings today took the 
    rating actions listed above.
    The positive CreditWatch placement reflects our view that SW will have a more 
    favorable credit profile than as a stand-alone company. At transaction close, 
    we expect PMI will repay or assume all SW's debt.
    We expect to resolve the CreditWatch as soon as we have clarity regarding the 
    offer's acceptance. We anticipate PMI will redeem or assume any outstanding 
    debt, and we will reevaluate the ratings at that time. If the transaction does 
    not complete due to regulatory or other reasons, we will likely remove the 
    'BBB' rating from CreditWatch and affirm it with a stable outlook, in line 
    with the rating prior to the acquisition's announcement.
    ESG credit indicators: E-2, S-3, G-2
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