Fitch views Bimbo's Panrico acquisition as positive

by Jeff Gelski
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The deal will strengthen the business position of Grupo Bimbo S.A.B. de C.V. in Spain and Portugal, according to Fitch.

MONTERREY, MXICO, and NEW YORK – Fitch Ratings said it believes Grupo Bimbo S.A.B. de C.V.’s agreement to acquire Panrico S.A.U. in Spain and Portugal is manageable with Bimbo’s current credit quality given the size of the acquisition valued at €190 million ($209 million).

“Fitch views this acquisition as positive to Bimbo’s operations as it will strengthen its business position in these countries and should provide synergies with complementary manufacturing plants, distribution networks and product portfolio,” Fitch Ratings said July 10, a day after a final agreement was reached on the acquisition. “In addition, Fitch does not foresee a material change in our previous estimation of Bimbo’s total debt-to-EBITDA trending below 3.0x in the next 12 to 18 months.”

Fitch said Bimbo’s rating outlook is stable. Fitch rates Monterrey-based Bimbo as ‘BBB’ for long-term issuer default rating (IDR), ‘BBB’ for local currency long-term IDR, ‘AA+(mex)’ for national long-term rating.

Bimbo’s planned acquisition of Panrico includes 100% of the company’s shares, excluding the branded packaged bread business. Panrico produces and distributes donuts and other bakery products for customers in Spain and internationally. Bimbo would add 16 facilities in Spain and three in Portugal through the acquisition.
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