Moody's reviews PepsiCo for downgrade

Moody's Investors Service said it placed the A1 senior unsecured long term ratings of PepsiCo, Inc. on review for downgrade following the company's Wednesday announcement it will acquire Rockstar Energy Beverages for $3.85 billion and about $700 million of payments related to future tax benefits.

The review will focus on the financial metrics that will result from the acquisition, including anticipated higher leverage and lower retained cash flow to net debt, as well as on the company's financial policies, which have become more aggressive in recent years.

The Rockstar deal will follow PepsiCo's acquisition of Pioneer Foods Group Ltd. for $1.7 billion and Hangzhou Haomusi Food Co., Ltd. for $705 million.

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