Fitch takes neutral view on US$747mn Copec-ExxonMobil deal

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Thursday, November 17, 2016

Fitch views the acquisition by Empresas Copec of ExxonMobil's lubricants businesses in Colombia, Peru and Ecuador as neutral to the Chilean group's credit quality, the ratings agency said Thursday.

Copec on Wednesday announced the transaction, valued at US$747mn, through which the Santiago-based holding company will also take over from Exxon the supply of jet fuel to the international airport in Peru's capital Lima.

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The deal follows acquisitions valued at US$33mn and US$264mn by Copec subsidiary Abastible of LPG distribution businesses in Ecuador and Peru, respectively.

"The acquisitions made in 2016, including the one just announced, leave Empresas Copec little head room for new inorganic growth or to face further economic downturns," Fitch said, adding, "Should the company continue investing inorganically and putting pressure on its credit metrics beyond Fitch expectations for the rating category [of 'BBB'], a negative rating action could be triggered."