November 22, 2012 / 10:40 AM / in 5 years

Germany's HeidelbergCement cancels contract with S&P

FRANKFURT, Nov 22 (Reuters) - Cement maker HeidelbergCement cancelled its contract with Standard & Poor‘s, becoming the second German blue-chip company this week to announce that it was dropping the ratings agency.

“Relations with the internationally recognised agencies Fitch Ratings and Moody’s will continue unchanged,” HeidelbergCement said on Thursday.

The news comes a day after Deutsche Post said it was switching from S&P to Fitch “for commercial reasons”.

The three big agencies - S&P, Moody’s and Fitch - dominate the market for the quality assessments of companies and individual securities that investors consider a vital component in their investment decisions. The agencies are paid by the companies they rate.

A dozen big German companies, including Bayer, E.ON, Daimler and Siemens, complained this year about “unacceptable” rises in S&P’s prices, which they said had more than doubled in some cases.

HeidelbergCement, however, said its decision to stop doing business with S&P was not because of commercial factors, but it did not elaborate further.

Germany’s banking industry also wrote to S&P in August to demand clarity on how the agency sets prices for the ratings it grants banks after invoices rose steeply, echoing an earlier complaint by industrial companies.

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