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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Sharck who wrote (36759)	10/24/2001 8:13:59 AM
From: Jim Spitz	Read Replies (1) \| Respond to of 37746

Following much anticipation, General Mills-Pillsbury deal clears FTC Ann Merrill Star Tribune Published Oct 24 2001 General Mills has finally gobbled up the Doughboy. The Golden Valley-based maker of Cheerios received clearance for the $10.5 billion purchase of the Pillsbury Co. from the Federal Trade Commission Tuesday afternoon following an unusually lengthy antitrust review. The deal was cleared after the FTC deadlocked 2-2 on a staff recommendation to challenge the transaction, which means the deal moves forward under the commission's guidelines. Staff lawyers said the purchase would hurt competition for dry cake and cookie mixes, since General Mills already owns the best-selling Betty Crocker brand. The acquisition brings brands such as Pillsbury, Green Giant, Progresso and Old El Paso to General Mills, doubling its size and making it the nation's third-largest food company. The new General Mills will have revenues of $13 billion, employ 28,000 workers worldwide. The news ends a long wait for Pillsbury's 17,000 employees, most of whom will be offered jobs at General Mills. Job losses are expected to be in the hundreds, not thousands, as the two companies put into play integration plans developed following the purchase announcement in July 2000. General Mills' purchase of Pillsbury also is significant for Minnetonka-based International Multifoods Corp., which has agreed to buy some of the Pillsbury and General Mills assets. General Mills, which dominates the dessert mix market with its own Betty Crocker brand, announced early on that it intended to sell Pillsbury's dessert mixes in order to avoid antitrust problems. Multifoods stepped forward as the buyer in February, with plans to spend $305 million to buy dessert mixes sold under the Pillsbury and Martha White brands, Pillsbury's Hungry Jack potato mix and shelf-stable breakfast items, and its noncustom foodservice baking mix business, along with General Mills' U.S. Robin Hood flour business. However, FTC staff lawyers felt the sale of Pillsbury's dessert mixes to Multifoods was an inadequate remedy to antitrust concerns. General Mills will keep the giggly, blue-eyed Doughboy as a mascot for other Pillsbury products such as refrigerated cookie dough and frozen breakfast treats. FTC staff lawyers had said this divestiture would hurt competition, arguing that splitting the brand with International Multifoods would reduce the incentive for General Mills to promote the brand. The vote followed a round of lobbying by company officials, who met with commissioners to persuade them to reject the staff recommendation and accept the divestiture package, people said. --Bloomberg News contributed to this report. © Copyright 2001 Star Tribune. All rights reserved.