FTC Hurdle Is Cleared in Deal for Pillsbury

A deadlocked Federal Trade Commission on Tuesday cleared the way for General Mills Inc.’s proposed $5.36-billion purchase of Pillsbury from British food group Diageo.

The commission split 2 to 2 on whether to oppose the deal in court and also deadlocked about a proposed antitrust settlement with the companies. The vote 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 restrictions.

However, General Mills has agreed to follow through on the divestments it offered the FTC during last-minute settlement negotiations with the agency, the companies said.

General Mills, which already makes breakfast cereals and Betty Crocker cake mixes, will sell a package of products to International Multifoods Corp. including Pillsbury’s baking mixes, frosting, flour products and pancake and potato mixes.

The FTC was the last hurdle facing the deal that was announced in July last year. European authorities cleared the purchase a year ago, and General Mills shareholders backed the deal in December.

The FTC in a separate vote challenged London-based Diageo’s joint $8-billion bid with Pernod-Ricard for Seagram Co.’s liquor business.

Diageo, the world’s largest liquor maker, would become a 33% owner of General Mills.

The news was announced after stock markets closed. General Mills shares rose 5 cents to $43.20 on the New York Stock Exchange in regular trading.

*

Bloomberg News and Reuters were used in compiling this report.