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Pepsi deal raises questions
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May 10, 2001: 2:09 p.m. ET
FTC worried about Pepsi's potential dominance of drink market
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NEW YORK (CNNfn) - The Federal Trade Commission has major concerns about PepsiCo Inc.'s plans to acquire Quaker Oats Co., an agency official told Reuters Thursday, but a Pepsi spokesman said there are no indications from regulators that the deal is in trouble.
Investigators at the agency's competition bureau reportedly fear the deal will enable Pepsi (PEP: up $0.14 to $45.68, Research, Estimates) to leverage Quaker Oats' (OAT: down $1.60 to $96.20, Research, Estimates) dominant Gatorade sports drink to gain undue advantage over other drink manufacturers.
"There's significant hand-wringing going on," a source at the agency said.
But a Pepsi spokesman said that, as recently as Thursday morning, FTC officials gave no indication that the commission was planning to block the merger.
"We are continuing our dialogue with the commission to reach a mutually acceptable outcome," Pepsi spokesman Dick Detwiler told Reuters. A Quaker spokesman declined to comment.
The agency's five-member commission, which must assess whether the deal complies with anti-trust laws, is scheduled to vote in the next several weeks on whether it should go to court to block the deal.
PepsiCo shareholders have approved the $13.8 billion merger, which was announced in December, on May 1, and the deal received clearance from European authorities in March.
Pepsi scored a coup over chief rival Coca-Cola Co. (KO: down $0.10 to $45.66, Research, Estimates) with the Quaker deal, bringing Gatorade into its portfolio. Gatorade is by far the dominant brand in the fast-growing sports drink category. 
- from staff and wire reports
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