Debt-financed purchases beyond that amount could put the Vevey, Switzerland-based company’s AA long-term debt rating at risk, S&P said today, though it expects the DiGiorno pizza maker to spend only about 2 billion francs a year on acquisitions.
Nestle is “highly cash-generative” and has a “conservative financial policy,” said S&P, which assesses the outlook for the debt rating to be stable.
The maker of Nescafe soluble coffee last year bought Pfizer Inc.’s baby-food business for $11.9 billion.
AA is the third-highest credit rating on S&P’s scale, and Moody’s Investors Service rates Nestle debt Aa2.
To contact the reporter on this story: Thomas Mulier in Geneva at email@example.com