CHICAGO (S&P Global Ratings) July 19, 2019--S&P Global Ratings today said that PepsiCo Inc.'s offer to acquire South Africa-based Pioneer Food Group Ltd. for ZAR110 per share in cash (for an approximately $1.7 billion purchase price) in a largely debt-financed transaction will modestly weaken the company's credit metrics but provide it with a beachhead to further penetrate the high-growth Sub-Saharan Africa region. We estimate that PepsiCo's adjusted leverage will increase by around 0.1x-0.2x and approach 2.75x, though this is still below our potential downgrade trigger of 3x adjusted leverage. The acquisition will provide the company with a portfolio of established brands and expand its scale in the high-growth, but lower-margin, region. We also expect that PepsiCo will look to leverage
