NESTLE GETS U.S. OK FOR PURINA TAKEOVER.Byline: Staff and Wire Services
The government cleared the way for the creation of a global pet-food empire Tuesday, approving Swiss food giant Nestle S.A.'s $10.3 billion purchase of Ralston Purina and alarming critics concerned that consumers will pay more to feed Fido and Fluffy fluff·y
adj. fluff·i·er, fluff·i·est
a. Of, relating to, or resembling fluff.
b. Covered with fluff.
2. Light and airy; soft: fluffy curls; a fluffy soufflé. .
While the deal brings together such brands as Alpo, Purina and Friskies, the companies agreed to sell Ralston's Meow Mix and Alley Cat alley cat
A homeless or stray cat.
Noun 1. alley cat - a homeless cat
domestic cat, Felis catus, Felis domesticus, house cat - any domesticated member of the genus Felis dry cat food brands, the Federal Trade Commission said. The agency's antitrust division has been considering the deal for 11 months.
The FTC's decision ``ensures even more competitiveness in the world's most important pet-care market,'' said Peter Brabeck-Letmathe Peter Brabeck-Letmathe (* November 13 1944 in Villach, Austria) is CEO of Nestlé.
Brabeck-Letmathe was born in a family with its origins in Iserlohn-Letmathe in North West Germany. , Nestle's chief executive.
Nestle holds 32 percent of the U.S. cat food market, while St. Louis- based Ralston has 26 percent. Nestle also adds Ralston's 28 percent share of the dog food market to the 10 percent it already has.
Nestle has agreed to sell Meow Mix and Alley Cat to the Boston-based investment firm J.W. Childs Equity Partners II LP, which owns the pet supply company Hartz Mountain, the FTC FTC
See Federal Trade Commission (FTC). said. Nestle will have to give up international trademarks for the brands and help Childs take them on.
Childs also must get FTC permission before reselling the brands during the next five years.
Without this agreement, Nestle would control about 45 percent of the U.S. dry cat food market, said Joe Simons, director of the FTC's Bureau of Competition.
Last week, Senate Judiciary Chairman Patrick Leahy, D-Vt., suggested that the FTC extend its investigation of the merger. He cited concerns from consumer and farm groups that the deal would give Nestle an unfair advantage on store shelves.
Arthur Jaeger jaeger (yā`gər), common name for several members of the family Stercorariidae, member of a family of hawklike sea birds closely related to the gull and the tern. The skua is also a member of this family. , associate director of the Consumer Federation of America The Consumer Federation of America (CFA) is a non-profit organization founded in 1968 to advance the consumer interest through research, education and advocacy.
According to CFA's website, its members are approximately 300 consumer-oriented non-profits, which themselves have , said the deal could hurt consumers.
``You're talking about one big player and we don't think that's going to serve the consumer's interest,'' Jaeger said. He said there could be ``price increases that you wouldn't otherwise see and less competition that leads to less innovation and fewer choices.''
But John McMillin, an analyst with Prudential Securities Inc., said the combined companies could be more efficient.
``I don't think consumers need to run out and buy their cat food right away because prices are going up,'' he said.
Although Nestle was already big in the canned pet food market, the deal makes them a major player in the fast-growing area of dry pet food, McMillin said. Buying Ralston means Nestle controls about one-third of the total U.S. pet food industry and a fifth of the world market, he said.
The FTC voted 4-0 to approve the deal, with Chairman Timothy Muris not voting. Muris once worked for a law firm that represented Nestle.
Nestle's current pet food business has annual sales of about $3.7 billion. Last year, Ralston sales were $2.25 billion in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and $450 million internationally.
In the deal announced in January, Nestle agreed to pay $33.50 in cash per Ralston share.
In July, the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the
European Community Commission approved the deal after Nestle agreed to take steps to take action; to move in a matter.
See also: Step to preserve competition in Spain, Italy and Greece.
Some procedural steps remain. The agreement is subject to a 30-day public comment period before the commission votes to make it final.
Nestle will retain a presence in St. Louis, merging its domestic Friskies pet food business with Ralston to form Nestle Purina Pet Care, the merged companies' North American operation North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. .
Ralston markets dry pet food under a number of different names, including Purina, Pro Plan and Meow Mix, and also makes cat and dog litter. Nestle, the world's largest food company, produces everything from Baby Ruth candy bars to Perrier spring water.
In 1985, Nestle purchased Carnation carnation: see pink.
Herbaceous plant (Dianthus caryophyllus) of the pink family, native to the Mediterranean, widely cultivated for its fringe-petaled, often spicy-smelling flowers. , which owned Friskies, and in 1994 it bought the Alpo brand.