Nestle not likely to buy General Mills
June 18, 2004
According to Reuters, Nestle SA has no plans for a major acquisition, its chief executive said last Friday, while analysts dismissed a report that the Swiss food maker was mulling a $22 billion bid for U.S. foods group General Mills Inc. A Nestle spokesman declined comment on the General Mills speculation. But Swiss newspaper L''Agefi reported on Friday that Nestle Chief Executive Peter Brabeck said there were no major deals on the horizon. A spokesman for Minneapolis, Minnesota-based General Mills declined to comment. Nestle, maker of Nescafe coffee and KitKat chocolate bars, has ruled out big acquisitions, citing regulatory concerns. It is the leader in most of its product areas like water, pet food and ice cream, and says it wants to get out of food processing in favor of higher-margin functional food items. General Mills, which makes Cheerios and Wheaties cereals, Progresso soups and Pillsbury refrigerated dough, has been struggling to offset sluggish bakery products sales in an era of low-carbohydrate diets. Nestle and General Mills cooperate in a joint venture to sell cereal.