SBD/3/Sponsorships Advertising Marketing

QUAKER OATS COMMITS "CEREAL MURDER" AND PURCHASES SNAPPLE

     "In a deal that will create the nation's third-largest soft-
drink company,"  Quaker Oats said Wednesday it is paying $1.7B in
cash to acquire Snapple Beverages.  Quaker Oats Chair-CEO William
Smithburg characterized the merger as an "offensive move to
enhance" Quaker's portfolio of products.  Securites Corp.'s John
Curti: "It's no secret that Quaker was being stalked by both
Coca-Cola and PepsiCo.  I think there was a defensive strategy
here" (Ronald Yates, CHICAGO TRIBUNE, 11/3).  By purchasing
Snapple, Quaker -- parent company of Gatorade -- plans to
strengthen Gatorade and Snapple sales in markets where they have
been traditionally weak.  Quaker spokesperson Patti Jo Sinopoli:
"We plan on taking Snapple where Gatorade has been and taking
Gatorade where Snapple has been" (Lisa Respers, L.A. TIMES,
11/3).  The Quaker Oats offer was announced as Snapple reported
that its third-quarter earnings had "plummeted" 74% to $7M in the
third quarter (Martin Peers, N.Y. POST, 11/3).  NBR's Nancy
Seifert called the deal a "cereal murder" for investors, as
Quaker stock dropped 7 3/4 to 67 1/8.  NBR's Diane Eastabrook
reports a "fierce" iced-tea war should follow by next summer
(PBS, 11/2).
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Related Topics:

Coca-Cola, PepsiCo

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