Bulletin: Fomento Economico Mexicano's Planned Acquisition Of Corporacion GPF Won't Weaken Financial Risk Profile

MEXICO CITY (S&P Global Ratings) Sept. 25, 2018--S&P Global Ratings said today that its ratings and outlook on Fomento Economico Mexicano S.A.B. de C.V. (FEMSA; global scale: A-/Stable/--; national scale: mxAAA/Stable/mxA-1+) are not affected by the company's announcement that it will acquire Corporacion GPF (GPF) through its majority-owned subsidiary, Socofar. GPF is a leading drugstore chain based in Ecuador, with more than 620 pharmacies nationwide mainly under the Fybeca and SanaSana brands. This transaction is still subject to Ecuadorian regulatory approvals and likely to be completed during the first quarter of 2019. We don't expect the cash transaction to affect our assessment of FEMSA's financial risk profile because we don't believe the company would incur additional debt to fund the

...MEXICO CITY (S&P Global Ratings) Sept. 25, 2018--S&P Global Ratings said today that its ratings and outlook on Fomento Economico Mexicano S.A.B. de C.V. (FEMSA; global scale: A-/Stable/--; national scale: mxAAA/Stable/mxA-1+) are not affected by the company's announcement that it will acquire Corporacion GPF (GPF) through its majority-owned subsidiary, Socofar. GPF is a leading drugstore chain based in Ecuador, with more than 620 pharmacies nationwide mainly under the Fybeca and SanaSana brands. This transaction is still subject to Ecuadorian regulatory approvals and likely to be completed during the first quarter of 2019. We don't expect the cash transaction to affect our assessment of FEMSA's financial risk profile because we don't believe the company would incur additional debt to fund the acquisition. Therefore, we continue to expect FEMSA to consistently maintain its adjusted debt-to-EBITDA ratio below 1.5x and discretionary cash flow (DCF) to debt above 25%. We also believe the integration...

Bulletin