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Diageo mulls Pillsbury sale
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July 10, 2000: 3:21 a.m. ET
Report: Conglomerate considering offers for $9B food unit
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LONDON (CNNfn) - Diageo PLC is set to fuel the frenzy of consolidation among food production companies by selling its £6 billion ($9 billion) U.S. food division Pillsbury, according to press reports Monday.
The U.K. beer-to-burgers conglomerate is reportedly considering the divestment of the unit that makes Haagen-Dazs ice cream, Old El Paso Mexican foods and Green Giant frozen vegetables, and might accept payment in the form of another company's stock.
A Diageo spokesman refused to comment to CNNfn.com on its plans for Pillsbury. 
Diageo, the world's largest spirits company, was formed from the 1997 merger of Guinness and Grand Metropolitan. Over the past year the shares have underperformed the wider London market. The company recently announced plans for a flotation of its Burger King fast-food restaurants unit.
Diageo also dabbled in the battle between Unilever PLC and Bestfoods Inc. earlier this year, holding talks with Bestfoods (BFO: Research, Estimates) as part of the U.S. firm's ultimately unsuccessful attempt to fight off Unilever.
Monday's reports indicated that bidders for Pillsbury could include Sara Lee Corp. (SLE: Research, Estimates), HJ Heinz Corp. (HNZ: Research, Estimates) and General Mills Inc. (GIS: Research, Estimates).
These companies have been left standing by recent moves toward consolidation in the sector. In addition to the $20 billion Bestfoods/Unilever deal, Philip Morris Cos. (MO: Research, Estimates) recently agreed to pay $15 billion for Nabisco Holdings Corp. (NGH: Research, Estimates). Along with Switzerland's Nestlé, the food-industry titans created by these deals are threatening to leave mid-tier operators far behind, analysts have said.
Diageo is scheduled to provide an update Tuesday on its financial performance so far this year, but may not mention any plans for Pillsbury. 
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Diageo
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