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BRIEFLY / FOOD

Heinz Drops Plans to Acquire Milnot Holding

April 28, 2001|Reuters

H.J. Heinz Co. abandoned plans to acquire Milnot Holding Corp., the maker of Beech-Nut baby food, hours after a federal appeals court decision cast serious doubt on whether the deal could overcome the objections of antitrust authorities. A three-judge appeals panel had imposed a preliminary injunction to block the deal, saying that Federal Trade Commission investigators had shown that competition would be "lessened substantially" in the $800-million-a-year U.S. market for baby food if it were to go forward. The companies had argued that their merger would create a more efficient national competitor to market leader Gerber, a unit of Switzerland-based Novartis. Pittsburgh-based Heinz, with about 17% of the baby-food market, and St. Louis-based Milnot, with 15%, had said that they did not compete directly in supermarkets where Gerber dominates and that, at best, just one other brand is given shelf space. FTC Chairman Robert Pitofsky said the ruling was one of the most important in recent years. The agency went to court to terminate the transaction soon after it was announced in February 2000. Shares of Heinz rose 33 cents to close at $39.20 on the New York Stock Exchange.

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