The U.S. District Court for the District of Columbia, in an opinion by Judge James Robertson, today ruled that the H.J. Heinz Company’s (NYSE: HNZ) proposed acquisition of Milnot Holding Corporation should be allowed to proceed under U.S. anti-trust laws. The judge denied a motion by the Federal Trade Commission for a preliminary injunction to block Heinz’s acquisition of Milnot, whose largest subsidiary is Beech-Nut Nutrition Corporation, maker of the popular Beech-Nut brand of prepared baby foods. Both companies called the ruling a “victory for consumers” that paves the way for a completion of the transaction, which was first announced on February 28, 2000.
Heinz and Milnot stated that today’s ruling affirmed their contention that Heinz’s acquisition of Beech-Nut is in the best interests of American consumers, will result in improved product offerings and more innovative competition in the baby food category, and will enable the company to offer a value-priced premium baby food that combines the respective strengths of Heinz and Beech-Nut in a national brand. During the trial, many retail customers supported the transaction, maintaining that it would energize baby food sales and increase competition against Gerber.
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The District Court affirmed the companies’ position, citing “powerful evidence in the record about the efficiencies realized by the merger, and about the enhanced prospects of the merged entity to introduce innovative products to compete with Gerber.” (The full text of the opinion is available on the U.S. District Court’s website, www.dcd.uscourts.gov.)
“We are delighted with the Court’s ruling,” said William R. Johnson, Chairman, President and CEO of H.J. Heinz Company. “We took this matter to the courts because we were confident that we had a very strong case and could demonstrate convincingly the substantial consumer benefits that would flow from the combination of Heinz and Beech-Nut.”
Scott Meader, President and CEO of Milnot Holding Corporation, said: “The real winners in this case are consumers. The effect of the Court’s ruling will be to introduce real competition in the baby food aisle by allowing the creation of a strong and credible national challenger to Gerber from two regional players.”
Milnot is privately held by Chicago-based Madison Dearborn Partners, Inc., a leading private equity firm with approximately $7 billion of assets under management.
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By GlobalDataABOUT HEINZ: With sales over US$9 billion, H. J. Heinz Company is one of the world’s leading marketers of branded foods to supermarkets and away-from- home eating establishments. Its 50 companies operate in some 200 countries, offering more than 57 hundred varieties. Among the company’s famous brands are Heinz, StarKist, Ore-Ida, 9-Lives, Weight Watchers, Wattie’s, Plasmon, Farley’s, Smart Ones, The Budget Gourmet, Linda McCartney, San Marco, Go Ahead!, Bagel Bites, John West, Petit Navire, Boston Market, Skippy, Kibbles ‘n Bits, Pounce, Pup-Peroni, Orlando, ABC, Olivine and Pudliszki. Information on Heinz is available at http://www.heinz.com.
