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Swedish Match Drops as Merrill Cuts Recommendation (Update1)  

Swedish Match AB, the world's second-largest maker of wet snuff and chewing tobacco, fell in Stockholm trading after Merrill Lynch & Co. cut its rating to ``neutral,'' citing the stock's valuation.

Swedish Match declined 2.75 kronor, or 2.4 percent, to 113.25 kronor, the steepest drop since July 2. That cut the company's market value to 28.5 billion kronor ($4.8 billion).

Merrill Lynch reduced its recommendation from ``buy'' . . .

``Overhanging tax change risks and similar to peer growth rates make it difficult to justify applying a premium rating on the name,'' Tovar wrote.

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