The U.S. Court of Appeals for the District of Columbia Circuit today ruled that the proposed acquisition by the H.J. Heinz Company (NYSE:HNZ) of Milnot Holding Corporation should not be allowed to proceed on anti-trust grounds. As a result of the court’s decision, the companies said that they would terminate the transaction, first announced on February 28, 2000.
The appellate court overturned the decision by the U.S. District Court for the District of Columbia that denied the Federal Trade Commission’s (FTC) motion for a preliminary injunction to block Heinz’s acquisition of Milnot, owner of the popular Beech-Nut® brand of prepared baby foods. (The text of Friday’s decision is available on the appellate court’s Web site at www.cadc.uscourts.gov.) The District Court had concurred with the companies’ argument that their combination would enhance competition by creating a stronger, national challenger to Gerber, whose share of the U.S. baby food market exceeds 70 percent. The FTC appealed the District Court’s ruling, which was issued on October 18, 2000 by Judge James Robertson.
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Heinz indicated that although it will need to re-evaluate its U.S. infant feeding strategy in light of today’s decision, it remains a global leader in the category. “Infant feeding is a billion-dollar global business for Heinz, which has number-one brands in Canada, the UK, Italy, Australia, New Zealand and China,” noted William R. Johnson, Heinz Chairman, President and Chief Executive Officer. “Half of the world’s infant foods are still home-prepared, which represents significant upside opportunity for strong global brands like Heinz that represent quality, convenience, innovation and excellent nutritional value.”
This news release contains forward-looking statements regarding the company’s future performance. These forward-looking statements are based on management’s views and assumptions, and involve risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These include, but are not limited to, sales, earnings and volume growth, competitive conditions, production costs, currency valuations, global economic and industry conditions, achieving cost savings and working capital and debt reduction programs, success of acquisitions, divestitures, innovations, and supply chain and overhead initiatives and other factors described in “Cautionary Statement Relevant to Forward-Looking Information” in the company’s Form 10-K for the fiscal year ended May 3, 2000, as updated from time to time by the company in its subsequent filings with the Securities and Exchange Commission.
ABOUT HEINZ: With sales over US$9 billion, H. J. Heinz Company is one of the world’s leading marketers of branded foods to consumers everywhere, whether in supermarkets, restaurants or on the go. Its 50 companies operate in some 200 countries, with more than 20 power brands, including the Heinz® brand with nearly US$3 billion in annual sales. Among the company’s famous brands are Heinz®, StarKist®, Ore-Ida®, 9-Lives®, Wattie’s®, Plasmon®, Farley’s®, Smart Ones®, Bagel Bites®, John West®, Petit Navire®, Kibbles `n Bits®, Pounce®, Pup-Peroni®, Orlando®, ABC®, Olivine®, Juran® and Pudliszki®. Heinz also uses the famous brands Weight Watchers®, Boston Market® and Linda McCartney® under license. Information on Heinz is available at http://www.heinz.com.
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