IN BRIEF : General Cinema OKs $1.75-Billion Sale of Soft Drink Unit to Pepsico
General Cinema Corp. said today it agreed to sell its soft-drink bottling business to Pepsico Inc. for $1.75 billion in cash, reviving a deal that had nearly been scuttled by tax concerns.
Late in 1988 General Cinema had agreed to sell the unit, which is the largest independent Pepsi bottler in the United States, to Pepsico. in exchange for a note valued at $1.5 billion.
However, the agreement, which was subject to completion prior to year end in order to garner a lucrative tax break, was nullified when the Federal Trade Commission requested more information on the deal, thus preventing completion before Dec. 31.
The company said the revised transaction is subject to a definitive agreement.
The acquisition will increase Pepsico’s direct ownership over of its bottlers to 49% of total units produced. Combined with other bottlers in which it holds a stake, it would have influence over 65% of its volume.
Analysts have said it is unlikely the FTC will seek to block the sale on anti-trust grounds.
Pepsico shares fell 75 cents to $38.75 in active trading on the New York Stock Exchange.
General Cinema stock rose $1.875 to $25.875 a share.