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Foodmakers sell units
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February 5, 2001: 8:17 a.m. ET
Deal could help General Mills clear regulatory hurdles in Pillsbury acquisition
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NEW YORK (CNNfn) - International Multifoods agreed Monday to acquire Pillsbury Co.'s desserts and specialty products business and General Mills' Robin Hood flour brand for $305 million in cash, a move that could help General Mills clear regulatory hurdles for its $10.5 billion acquisition of Pillsbury.
Cereal maker General Mills agreed last July to acquire Pillsbury, a unit of Britain's Diageon PLC for $10.5 billion. The deal combines Pillsbury's Doughboy refrigerated products, Haagen-Dazs ice cream and Old El Paso Mexican food with General Mills' Cheerios and other breakfast cereals, Yoplait and Colombo yogurts, and Betty Crocker cake mixes.
General Mills' Robin Hood flour brand is a market leader in Canada, while Pillsbury's dessert and baking business includes Hungry Jack potato mixes. With the proposed deal, both companies could eliminate antitrust concerns at the U.S. Federal Trade Commission about their planned merger.
 The merger would double General Mills' annual revenue to about $13 billion, the company said in July, predicting its operating profit would climb to $1.9 billion from $1.1 billion in the year ended May 31.
International Multifoods' acquisition of both companies' businesses is contingent upon regulatory approval of their deal.
Separately, International Multifoods said it expects to fall short of Wall Street's fourth-quarter estimates. General Mills said it expects to exceed third-quarter estimates.
Shares of General Mills (GIS: Research, Estimates) slipped 45 cents to $41.51 in trading Friday. International Multifoods (IMC: Research, Estimates) shares fell 7 cents to $21.53. 
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