FTC Gets Stay on Heinz Acquisition Deal

H.J. Heinz Co. was blocked from closing its proposed acquisition of the maker of Beech-Nut baby food by a federal appeals court until antitrust authorities appeal a lower court’s decision. The Federal Trade Commission sought the stay of Heinz’s $185-million purchase of Milnot Holdings Corp. while it appealed a decision denying a preliminary injunction to halt the deal while the antitrust agency challenged the merger in court. An injunction could effectively kill the deal while the FTC goes to court to contest the combination out of concern for competition, a process that often can take months, possibly years. “It is indisputable that the merger will eliminate competition between the two merging parties at the wholesale level. . . ,” the U.S. Appeals Court for the District of Columbia said in its four-page order. Heinz and Milnot together have about 30% of the baby food market, while Gerber, a unit of Novartis, has 70%. The FTC had argued that prices would be lower and there would be more competition if the two companies were kept apart. Heinz argued that competition would be enhanced by the acquisition. Shares of Pittsburgh-based Heinz closed up 19 cents at $42.44 on the New York Stock Exchange.