April 24 (The following statement was released by the rating agency)
Fitch Ratings says that there is no rating impact on Anheuser Busch InBev NV/SA (ABI, 'A'/'F1') following the revised final terms of the agreement reached on 17 April 2013 with the Department of Justice for the completion of the acquisition of a 50% stake in Grupo Modelo SAB de CV (Modelo).
The final terms do not materially alter ABI's credit metrics and operational profile compared with Fitch's original expectations. The agency affirmed ABI's ratings on 2 July 2012 following the initial announcement of the transaction.
In addition to the already agreed divestment of a 50% stake in the Crown Imports distribution joint venture for USD1.85bn, last week's agreements involve the sale of manufacturing assets in Mexico and rights to Modelo brands in the US in perpetuity for USD2.9bn. These transactions reduce the EBITDA that ABI will acquire with Modelo by USD0.31bn to USD1.8bn and increase the amount of proceeds from the sale of assets to Constellation Brands ('BB+'/RWN) to USD4.7bn against an initial agreement of USD1.85bn. These changes neutralise each other in terms of leverage.
Thanks to Modelo's strong profitability Fitch expects an only minor dilution of ABI's superior EBITDA margin of 39%. Also, despite the financial charges related to the transaction and to the acquisition of a 51% stake in Cerveceria Nacional Dominicana for USD1.2bn in 2012, ABI's annual free cash flow should remain in the range of USD5bn to USD6bn over 2013-2015.
The net cash disbursement for ABI will be USD12.8bn, compared with an initial estimate of USD14bn. Based on these new terms, the agency still projects pro-forma (annualising Modelo's EBITDA) lease adjusted net debt/operating EBITDAR in the range of 2.1x-2.3x and FFO-based lease adjusted net leverage at approximately 2.5x in 2013. Both ratios are fractionally higher than the levels compatible with ABI's 'A' rating. However, Fitch expects them to drop below 2012's levels in 2014 and this supports the Stable Outlook.