Nabisco acquisition cleared
|
|
December 7, 2000: 6:15 p.m. ET
FTC asks Philip Morris to divest several Nabisco units to seal $14.9B deal
|
NEW YORK (CNNfn) - The U.S. Federal Trade Commission cleared Philip Morris Cos.'s $14.9 billion acquisition of Nabisco Holdings Corp. Thursday, but required the tobacco and food company to divest several minor food operations to avoid antitrust concerns.
In a ruling handed down after the closing bell Thursday, the FTC ordered the New York-based company to divest several Nabisco operations, including its Royal brand dry-mix gelatin desserts and no-bake desserts, its Royal and My-T-Fine dry-mix pudding brands, and its Davis and Fleischmann's baking powder assets.
The commission said the divestitures were being required because those industries were already highly-concentrated and, in several cases, dominated by only Philip Morris and Nabisco.
Without the divestitures, the FTC said it "believed the proposed acquisition would eliminate substantial competition between Philip Morris and Nabisco, and would increase concentration in each relevant market, resulting in higher prices."
The FTC order requires the company to complete the divestitures within 10 business days of consummating their merger.
Nabisco (NH: Research, Estimates) has already reached an agreement in November its sell its intense mints business, which includes Ice Breakers and Breath Savers mints, as well as Bubble Yum and Carefree gums, to Hershey Foods Co. for $135 million in cash. The unit posted revenue of $270 million last year.
Combined, Philip Morris (MO: Research, Estimates) and Nabisco will rank as the world's largest food company with annual sales in excess of $100 billion in food products alone.
|
|
|
|
Philip Morris
Nabisco
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
|
|