Research Update: Fomento Economico Mexicano 'A-' Rating Placed On CreditWatch Negative On Planned Acquisition Of Valora Holding AG

On July 6, 2022, Mexico-based retailer, Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA), announced an all-cash offer to purchase all of the publicly held shares of Valora Holding AG for CHF260 per share. FEMSA will fund the up to CHF 1.1 billion transaction with cash from its balance sheet. Upon closing, S&P Global Ratings' adjusted pro forma leverage expectations may be more than 2.0x, above our rating threshold and prior forecast of below 1.5x for year-end 2022 and 2023. On July 6, 2022, S&P Global Ratings placed its 'A-' global scale long-term issuer credit and issue-level ratings on FEMSA on CreditWatch with negative implications. We also affirmed our 'mxAAA' long-term and 'mxA-1+' short-term national scale ratings with a stable outlook.

...- On July 6, 2022, Mexico-based retailer, Fomento Econ=mico Mexicano, S.A.B. de C.V. (FEMSA), announced an all-cash offer to purchase all of the publicly held shares of Valora Holding AG for CHF260 per share. FEMSA will fund the up to CHF 1.1 billion transaction with cash from its balance sheet. - Upon closing, S&P Global Ratings' adjusted pro forma leverage expectations may be more than 2.0x, above our rating threshold and prior forecast of below 1.5x for year-end 2022 and 2023. - On July 6, 2022, S&P Global Ratings placed its 'A-' global scale long-term issuer credit and issue-level ratings on FEMSA on CreditWatch with negative implications. We also affirmed our 'mxAAA' long-term and 'mxA-1+' short-term national scale ratings with a stable outlook. - We plan to resolve the CreditWatch listing once the acquisition is completed and we have performed a full assessment of FEMSA's pro forma credit profile, including its integration plan, final capital structure, long-term strategy, and business...

Research Update