Moody's says MeadWestvaco Corporation's announcement that it will spin-off its specialty chemical business into a separate, publicly traded company is credit negative because it will become a smaller, less-diversified and more highly leveraged company.
The principal methodology used in rating MWV was Global Paper and Forest Products Industry published in October 2013.
Based in Richmond, Virginia, MWV is a global packaging company focused on the food and beverage, personal care, home and garden, tobacco, healthcare and agricultural and industrial markets.
In January 8 2015, MeadWestvaco announced that its Specialty Chemicals business will be separated from the rest of the company. The separation is expected to be executed by means of a tax-free spinoff of the Specialty Chemicals business to MWV shareholders, resulting in two independent, publicly traded companies. According to MWV the spinoff will enhance value for shareholders by creating two strong, market-leading companies.
