Bulletin: Woolworths' Separation Of Hotel And Beverage Business To Reduce Diversity

MELBOURNE (S&P Global Ratings) July 3, 2019--S&P Global Ratings today said that Woolworths Group Ltd.'s (Woolworths; BBB/Stable/A-2) intention to separate its high-margin liquor and hotel businesses will reduce the group's scale and diversity. Nevertheless, the proposed separation does not immediately affect the ratings on the group. The major group restructure will involve the merger of Endeavour Drinks and Australian Leisure and Hospitality Group into a combined entity (Endeavour Group). The Endeavour Group will separate from Woolworths through either a demerger or a trade sale. The group expects to complete the separation during calendar year 2020. In our view, the group's Australian and New Zealand food business remains strong, although the separation will reduce the group's scale and diversity. In addition,

...July 2, 2019 MELBOURNE (S&P Global Ratings) July 3, 2019--S&P Global Ratings today said that Woolworths Group Ltd.'s (Woolworths; ###/Stable/A-2) intention to separate its high-margin liquor and hotel businesses will reduce the group's scale and diversity. Nevertheless, the proposed separation does not immediately affect the ratings on the group. The major group restructure will involve the merger of Endeavour Drinks and Australian Leisure and Hospitality Group into a combined entity (Endeavour Group). The Endeavour Group will separate from Woolworths through either a demerger or a trade sale. The group expects to complete the separation during calendar year 2020. In our view, the group's Australian and New Zealand food business remains strong, although the separation will reduce the group's scale and diversity. In addition, the reduced exposure to hotels and gaming removes significant regulatory risks and improves the group's perceived social license to operate. As of the year ended June...

Bulletin