...March 3, 2025 This report does not constitute a rating action. TOKYO (S&P Global Ratings) March 3, 2025--Aeon could strain its financial capacity by investing to make two subsidiaries fully owned. Aeon Co. Ltd. (###/Stable/--) will start talks to make subsidiary Aeon Mall Co. Ltd. (###/Stable/--) wholly owned through an exchange of stock in a deal announced Feb. 28, 2025. The company also announced that it will acquire the shares of listed subsidiary Aeon Delight Co. Ltd. (unrated) for about Ñ110 billion through a tender offer, and make it a wholly owned subsidiary. S&P Global Ratings believes that Aeon's capacity to absorb the financial burdens will likely lessen amid a severe consumption environment and increased investment. We forecast the financial burden of taking full ownership of the subsidiaries will worsen the debt-to-EBITDA ratio of Aeon's nonfinancial business by 0.1 point. Before the deal, we had forecast the ratio to be around 4.0x. On top of the transactions, we assume Aeon...
