Moody's affirms VF

Moody's Investors Service said it affirmed VF Corp.'s senior unsecured ratings at A3 and prime-2 commercial paper rating.

The outlook remains stable.

The action follows news that VF has entered into a definitive agreement to acquire the Timberland Co. in an all-cash transaction valued at about $2 billion, Moody's said.

The transaction is expected to close in the third quarter of 2011 and is subject to Timberland shareholder approval and other customary closing conditions.

It is expected that funding for the transaction will be sourced from a combination of cash on hand, commercial paper and term debt, the agency said.

The acquisition of the well-recognized Timberland brand will further enhance the position of VF's outdoor and action sport segment, which already includes brands such as the North Face and Vans, Moody's said.

The acquisition will improve VF's overall diversification, as Timberland significantly enhances VF's position in the footwear category, the agency said.

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