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