Newspaper article The Florida Times Union

Coke, PepsiCo Battle for Quaker Oats, Gatorade

Newspaper article The Florida Times Union

Coke, PepsiCo Battle for Quaker Oats, Gatorade

Article excerpt

CHICAGO -- Call it the cola wars without the fizz.

Coca-Cola Co. and PepsiCo apparently are battling to acquire Quaker Oats Co., maker of the lucrative Gatorade beverage line. Industry experts say Quaker would be a feather in the cap of either company, particularly because sales of carbonated soft drinks have stalled while sports drinks are booming.

"I think it would make sense for Coke or Pepsi to own Gatorade, and it would probably make sense for each of them to try to keep the other from owning Gatorade," said John Sicher, editor of the industry publication Beverage Digest.

Quaker Oats' board of directors met over the weekend to discuss possible deals with Coca-Cola Co. or France's Danone SA, which makes Evian and other bottled water brands, The Wall Street Journal and The New York Times reported yesterday, citing people familiar the matter.

Coke reportedly emerged as the leading candidate.

The Atlanta-based soft drinks giant confirmed yesterday it was in talks with Quaker, but said there was no guarantee a deal would be reached. The company said in a statement it would only consider an agreement that advances its "strategy of continuing to build a total non-alcoholic beverage company."

"Any agreement must be consistent with our strategic program and enhance our ability to increase value to our shareowners and our other constituents, as well as deliver value to consumers," said chairman and chief executive officer Doug Daft.

Earlier this month, Quaker rejected a $14.8 billion takeover offer from PepsiCo. Robert Morrison, head of Chicago-based Quaker, called the offer insufficient.

Food industry analysts said yesterday that another bid from Pepsi is possible, although Coke is in a better position to pay the highest price.

A spokesman for Purchase, N. Y.-based PepsiCo declined comment yesterday, as did a spokeswoman for Danone in Paris. Officials at Quaker Oats did not immediately return calls. A Quaker spokesman refused to comment Sunday on the reports, calling them "rumor and speculation. …

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