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Rating Action:

Moody's reviews Anheuser-Busch InBev's A2/ Prime-1 ratings for downgrade

13 Oct 2015

New York, October 13, 2015 -- Moody's Investors Service placed the ratings of Anheuser-Busch InBev SA/NV ("ABI") and certain related subsidiaries under review for downgrade, including the A2 long-term senior unsecured ratings and its short-term Prime-1 rating.

Today's action follows the announcement that ABI has reached an agreement in principle to acquire SABMiller PLC (A3/Prime-2) for approximately 44 British Pounds per share or approximately $106 billion in cash and shares, and to mutually request an extension of the deadline under UK takeover rules to continue negotiations.

In its review Moody's will consider the significant increase in leverage and likely time period to reduce leverage as a result of the partially debt funded acquisition, the execution risks associated with meeting regulatory requirements including asset sales, the implication for various partnerships that the companies' have globally, integration risks, possible synergies, and the likely financial policy going forward. In its review Moody's will also consider the strategic benefits of the acquisition including greater scale and business and geographic diversification. Moody's also notes that the agreement in principle increases the likelihood of a transaction, but that it does not constitute a formal offer. Therefore the terms of the deal could change, or no transaction could ultimately be consummated. Moody's expects that any downgrade would be no more than three notches, however any actual rating change could be less material depending on the final terms and structure of the transaction.

RATINGS RATIONALE

ABI's A2/Prime-1 ratings (under review for downgrade) reflect the company's position as the world's largest brewer, its wide portfolio of brands at various price points, and leading positions in some of the largest and most profitable beer markets in the world. It also reflects ABI's seasoned management with a solid track record of integrating acquisitions, as well as improving efficiencies and Moody's expectation that the company will reduce leverage over the medium term. The ratings are further supported by the company's strong margins, excellent liquidity and large, stable cash flows. At the same time, the ratings factor in the company's exposure to somewhat volatile economies, including parts of Latin America and Asia, in addition to declining beer consumption in developed markets such as North America and Europe.

Ratings Placed On Review for Downgrade:

Anheuser-Busch InBev SA/NV

A2 issuer rating

A2 senior unsecured long-term bonds

(P)A2 senior unsecured shelf

(P)Prime-1 commercial paper shelf

Anheuser-Busch InBev Finance, Inc.

A2 senior unsecured long-term bonds

(P)A2 senior unsecured shelf

Anheuser-Busch InBev Worldwide Inc.

A2 senior unsecured long-term bonds

Prime-1 commercial paper

Anheuser-Busch Companies, LLC

A2 issuer rating

(P)A2 senior unsecured shelf

A2 senior unsecured long-term bonds

Anheuser-Busch InBev SA/NV (ABI), incorporated in Leuven, Belgium, is the world's largest brewing company. ABI has operations in over 25 countries and sells its products in over 130 countries, with market leading positions in North America, Brazil, Mexico and Argentina. In Brazil, it operates through its subsidiary Companhia de Bebidas das Americas ("AmBev") (rated Baa1, stable). The company reported $45.8 billion in revenue for the twelve months ended June 30, 2015.

SABMiller plc ("SABMiller") is the world's second-largest brewer by volume, behind Anheuser-Busch InBev, producing and distributing a large variety of beer brands in approximately 75 countries. During financial year ending (FYE March 2015), the company reported revenues net of excise duty of USD16.5 billion.

The principal methodology used in this rating was Global Alcoholic Beverage Industry published in October 2013. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Linda Montag
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Peter H. Abdill, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's reviews Anheuser-Busch InBev's A2/ Prime-1 ratings for downgrade
No Related Data.
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