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FTC Approves $40-Billion Merger

December 16, 1997|From Reuters

The $40-billion merger of Grand Metropolitan and Guinness, the largest in British corporate history, got past its final hurdle Monday.

The merger partners won clearance to combine forces in the United States from the Federal Trade Commission, providing that Diageo, the new name of the merged food and drinks giant, sells its worldwide interests in Dewar's Scotch whisky and two Bombay gin brands.

The merger would create the world's sixth-biggest food and drinks group, and the world's largest spirits and wines business by sales.

In October, the European Commission granted approval on similar conditions, most significantly the sale of the Dewar's and Ainslie's Scotch whisky brands in Europe.

Shares in Diageo, which would rank as Britain's eighth-biggest company, are due to begin trading on Wednesday, while Guinness and GrandMet will be delisted.

Industry analysts estimate Dewar's is worth about $1 billion.

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