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A deadlocked U.S. Federal Trade Commission (FTC) cleared the way for General Mills Inc.'s proposed $5.36 billion purchase of Pillsbury from British food group Diageo Plc.
The commission split 2-2 on whether to oppose the deal in court and also deadlocked over a proposed antitrust settlement with the companies. The split votes fell short of the majority the FTC needs to take action, so the acquisition of Pillsbury, best known for its line of refrigerated baked goods, can go forward without any restrictions, according to Reuters.
However, General Mills has agreed to follow through on all the divestments that it offered the FTC during last-minute settlement negotiations with the agency, according to the agency's general counsel, the companies said.
Specifically, General Mills, which already makes breakfast cereals and Betty Crocker cake mixes, will sell a package of products to International Multifoods Corp. consisting of Pillsbury's baking mixes, ready-to-spread frosting, flour products and pancake and potato mixes; as well as its Pet Milk, Farmhouse Foods, Soft as Silk Flour, Red Band Flour and La Pina Flour brands.
Under the terms of the deal, General Mills will license Multifoods to use the Pillsbury trademarks it will acquire in the acquisition, including the well-known Pillsbury "Doughboy," the report said.
General Mills also has agreed to help International Multifoods recondition an existing plant in Toledo, Ohio and take other steps to help the company absorb the divested assets. The FTC was the last hurdle facing the deal that was announced in July last year. European competition authorities cleared the purchase a year ago and General Mills shareholders backed the acquisition in December.
General Mills, Diageo and International Multifoods released a joint statement saying they were "pleased" with the FTC vote and "look forward to completing their transactions as soon as possible."