Bulletin: Nestle S.A. Has Rating Headroom To Absorb Bountiful Acquisition

PARIS (S&P Global Ratings) April 30, 2021--S&P Global Ratings today said that global food and beverages group Nestle S.A. has sufficient rating headroom to absorb the announced acquisition of The Bountiful Co., a strategic player in the U.S. nutrition and supplement market. We estimate that the acquisition for a consideration of $5.75 billion, in combination with its Swiss franc (CHF) 20 billion share buyback program initiated last year, will push leverage up above 2.0x but below 2.5x in the two coming years--thereby exhausting headroom under our 'AA-' rating on Nestle. The group's operating performance should continue to benefit from expansion in high-growth categories like pet care and coffee, as well as increasing market penetration in Asia. The acquisition of The

...April 30, 2021 PARIS (S&P Global Ratings) April 30, 2021--S&P Global Ratings today said that global food and beverages group Nestle S.A. has sufficient rating headroom to absorb the announced acquisition of The Bountiful Co., a strategic player in the U.S. nutrition and supplement market. We estimate that the acquisition for a consideration of $5.75 billion, in combination with its Swiss franc (CHF) 20 billion share buyback program initiated last year, will push leverage up above 2.0x but below 2.5x in the two coming years--thereby exhausting headroom under our '##-' rating on Nestle. The group's operating performance should continue to benefit from expansion in high-growth categories like pet care and coffee, as well as increasing market penetration in Asia. The acquisition of The Bountiful Co. complements Nestle's existing health and nutrition portfolio both in terms of brands and channels, and provides additional growth momentum. We believe the group's profitability will continue to...

Bulletin