NEW YORK — Moody’s Investors Service placed the Baa1 senior unsecured and Prime-2 short-term ratings of Northfield, Ill.-based Kraft Foods Inc. and its subsidiaries under review for possible downgrade following the company’s announcement it has bid to acquire the global biscuit business of Groupe Danone for €5.3 billion ($7.2 billion), and would fund the purchase primarily with debt.

Moody’s said the review is based on "the significant increase in leverage" that would result from the debt-financed transaction, as well as what it believes is "a further shift toward a more aggressive financial policy." In addition, the review reflects "the added challenge of integrating a large international business at a time when Kraft is in the midst of a $3 billion restructuring, and is in the process of revamping its vast product portfolio," Moody’s said.

Moody’s did indicate that if a downgrade were to occur, Kraft most likely would retain an investment grade rating.

Kraft plans to fund the acquisition with $7 billion in Euro-denominated debt financing, which would be incremental to the at least $2 billion of other borrowings that Moody’s estimates will be needed to fund the two-year $5 billion share repurchase plan announced earlier this year.

"The proposed transaction appears to be a good fit with Kraft’s own biscuit business and helps Kraft to expand in Europe and emerging markets, but it also signals a more aggressive posture with respect to financial policy, and an apparent willingness to trade off some credit quality to meet shareholder demands for better returns," said Brian Weddington, vice-president, senior analyst, Moody’s Investors Service.