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News > Deals
Pepsi deal raises questions
May 10, 2001: 2:09 p.m. ET

FTC worried about Pepsi's potential dominance of drink market
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NEW YORK (CNNfn) - The Federal Trade Commission has major concerns about PepsiCo Inc.'s plans to acquire Quaker Oats Co., an agency official told Reuters Thursday, but a Pepsi spokesman said there are no indications from regulators that the deal is in trouble.

Investigators at the agency's competition bureau reportedly fear the deal will enable Pepsi (PEP: up $0.14 to $45.68, Research, Estimates) to leverage Quaker Oats' (OAT: down $1.60 to $96.20, Research, Estimates) dominant Gatorade sports drink to gain undue advantage over other drink manufacturers.

"There's significant hand-wringing going on," a source at the agency said.

But a Pepsi spokesman said that, as recently as Thursday morning, FTC officials gave no indication that the commission was planning to block the merger.

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"We are continuing our dialogue with the commission to reach a mutually acceptable outcome," Pepsi spokesman Dick Detwiler told Reuters. A Quaker spokesman declined to comment.

The agency's five-member commission, which must assess whether the deal complies with anti-trust laws, is scheduled to vote in the next several weeks on whether it should go to court to block the deal.

PepsiCo shareholders have approved the $13.8 billion merger, which was announced in December, on May 1, and the deal received clearance from European authorities in March.

Pepsi scored a coup over chief rival Coca-Cola Co. (KO: down $0.10 to $45.66, Research, Estimates) with the Quaker deal, bringing Gatorade into its portfolio. Gatorade is by far the dominant brand in the fast-growing sports drink category. graphic


- from staff and wire reports





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.