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FTC checks out GMG deal
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June 20, 1997: 12:58 p.m. ET
FTC requests another round of details from alcoholic beverage producers
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NEW YORK (CNNfn) - The U.S. Federal Trade Commission has made a second request to Britain's Grand Metropolitan Plc for information regarding its proposed $39.2 billion merger with Guinness Plc.
Grand Met said it was as yet unaware of what additional information was needed. "At this stage, they've not come out with any details," explained Neil Garnett, group public relations director for Grand Metropolitan. "They've simply said that they require more time to look at it."
Garnett went on to say that Grand Met expected that with a deal of this size, additional requests would be made.
An FTC spokeswoman said the agency does not comment on investigations in progress. The Grand Met-Guinness merger also requires European antitrust regulatory approval.
The news follows Thursday's disclosure that French luxury group LVMH has increased its holdings in Grand Metropolitan in an attempt to thwart the merger.
LVMH increased its Grand Met stake to 6.29 percent from 3.2 percent by buying 125 million shares for $1.29 billion. LVMH also owns 14 percent of Guinness shares.
LVMH Chairman Bernard Arnault wants the two companies to drop the merger plans. Instead, he wants to create a group combining LVMH's Moet & Chandon and Hennessy brands with Guinness's Johnny Walker, Dewars and Gordon's Gin labels and, possibly, Grand Met's Smirnoff, J&B and Baileys brands.
Grand Met is hoping that arbitration talks will ameliorate the situation. Those talks, however, could take a long time to resolve.
Grand Met's Garnett has said the turn of events changes nothing. "We're still firmly committed to this merger. What he's done will not affect us."
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