FTC approves merger of Ralcorp Holdings' branded cereals & snacks with General Mills

Business Wire, Dec 26, 1996

ST. LOUIS--(BUSINESS WIRE)--Dec. 26, 1996--The Federal Trade Commission (FTC) today announced that it has entered into an agreement with General Mills which states that the FTC will not oppose the merger of Ralcorp Holdings, Inc.'s branded cereal and snack business with General Mills, Inc.

General Mills, in turn, has agreed to eliminate a non-compete provision from the contract that would have prevented Ralcorp Holdings, the nation's largest producer of private label cereals, from producing a private label emulation of the CHEX brand line of cereals and snacks for a period of 18 months following the completion of the merger. The CHEX line of cereals and snacks is the largest of the Ralcorp brands being acquired by General Mills through the merger.

The agreement also allows Ralcorp to proceed with plans to conduct a special meeting of shareholders for the purpose of voting on the proposed merger with General Mills and the spin-off of Ralcorp Holdings, Inc. Ralcorp will hold the special meeting on January 31, 1997, at 8:30 a.m. at the Holiday Inn in Collinsville, Il. Proxy materials will be mailed to shareholders to allow them to cast their vote by mail. If shareholder approval is received, Ralcorp and General Mills expect to complete the merger by the close of business on January 31, 1997.

"We are extremely pleased with the agreement reached by General Mills and the FTC," said Joe R. Micheletto, Chief Executive Officer and President of Ralcorp Holdings. "We are confident that our shareholders will approve the merger, which will allow us to realize tax-free, $570 million in shareholder value. The General Mills transaction will also allow us to greatly improve Ralcorp's balance sheet, through a significant reduction in our debt."

Ralcorp reached an agreement in August 1996 to sell its branded cereal and snack business to General Mills, Inc., for General Mills common stock and the assumption of Ralcorp debt, together valued at $570 million. The transaction uses a tax-free reorganization structure that includes the merger of Ralcorp's branded cereal and snack line with General Mills and the spin-off of Ralcorp's remaining private label cereal, baby food and private label cracker and cookie businesses to Ralcorp shareholders. In July 1996, the Company also announced that it had reached an agreement to sell its Ralston Resorts ski subsidiary to Vail Resorts, Inc., for stock in Vail and assumed Ralcorp debt. That transaction is being valued at approximately $310 million and is currently under government review.

CONTACT: Ralcorp Holdings, Inc., St. Louis

Patrick T. Farrell, 314/877-7095