NEW YORK (AP) — Fitch Ratings downgraded its ratings on ConAgra Foods and two other rating agencies are reviewing their assessment of ConAgra and Ralcorp, following the food company's announcement Tuesday that it plans to buy private-label food producer Ralcorp for $5 billion.
ConAgra Foods Inc., whose brands include Banquet and Chef Boyardee, will pay $90 per share to Ralcorp Holdings Inc. stockholders. The companies value the transaction at about $6.8 billion, when debt is included. The acquisition is expected to close by the end of March, provided it gets approval from Ralcorp shareholders.
Fitch said Tuesday that it has downgraded its long-term issuer default, senior unsecured notes and bank credit facility ratings on ConAgra one notch to "BBB-" from "BBB" on concerns about its debt position. The rating change keeps it in investment-grade territory. It also affirmed the same ratings for Ralcorp at "BBB-".
Standard & Poor's Ratings Services on Tuesday placed ConAgra's investment-grade "BBB" long-term corporate credit ratings, along with other ratings, on review for possible downgrade.
S&P also put Ralcorp's "BBB-" issue-level rating on review for possible downgrade. A downgrade would move the company's rating out of investment-grade status and into junk-grade territory. It affirmed Ralcorp's "BBB-" corporate credit rating but said the outlook on that rating is negative.