In Business This Week: HEADLINER: WILLIAM STIRITZ
CIAO, DOG CHOW?
William Stiritz has a knack for surprises, but his latest is a doozy. On May 23, Stiritz, 62, said he would give up his CEO duties at Ralston Purina years before outsiders expected. Effective Oct. 1, he's dividing the job between pet-food boss Patrick Mc-Ginnis, 49, and Eveready battery kingpin Patrick Mulcahy, 53.
The move rekindled rumors that Ralston would split in two, sending the stock up 3.5%, to 85 3/4, that day. Stiritz has long been a spin-off fan: In 16 years as CEO, he has unloaded everything from tuna boats to fast-food chains. Ralston's international farm-animal feed unit is slated to be spun off next year, and its international soy-protein unit could go soon, too.
Though Stiritz stressed on May 27 that pet foods and batteries will stay together, some analysts still believe that his decision to name co-CEOs signals a breakup. "It's not a question of whether, but when," says Prudential Securities' John McMillin.EDITED BY KELLEY HOLLAND By Greg BurnsReturn to top
TAKING TURNS AT THE HELM
ARE TWO HEADS BETTER THAN one? When rental car and real estate giant HFS merges with direct marketer CUC International in a $10.9 billon deal announced May 27, their CEOs will take turns at the helm. At first, HFS chief Henry Silverman, 56, will be chairman, and CUC's Walter Forbes, 54, will be CEO. The two will switch in 2000. The deal gives CUC access to numerous potential customers of HFS's many franchises, which include Howard Johnson and Days Inn. For Silverman, who has been aggressively accumulating businesses, the merger with CUC is an acknowledgment that HFS needs more marketing muscle. But this may not be Silverman's last deal. Both HFS and CUC are reported to be eyeing the $1 billion Signature catalog unit of ailing retailer Montgomery Ward.EDITED BY KELLEY HOLLANDReturn to top
JOE CAMEL ISN'T OVER THE HUMP
IS JOE CAMEL TOO APPEALING to kids? The Federal Trade Commission seems to think so. On May 28, the FTC announced it was charging R.J. Reynolds Tobacco with using the dromedary to target children, violating rules against unfair advertising practices. Three years ago, the FTC lacked evidence for a complaint. But after internal documents recently released by tobacco companies indicated a major industry push to attract younger smokers, the agency decided to act.EDITED BY KELLEY HOLLANDReturn to top
GULPING DOWN COKE BOTTLERS
THINGS GO BIGGER WITH COCA-Cola Enterprises. Coke's biggest distributor on May 27 offered to buy two large Coke bottlers in Canada and the U.S. in deals worth $1.7 billion. The deals would give Coca-Cola Enterprises more than 65% of all Coca-Cola bottle and can sales in Canada and the U.S., up from 53% now. The move is in line with Coke's strategy of grouping its bottling operations into large "anchor bottlers." CCE has been on an acquisition binge over the last two years, gobbling up at least seven other bottlers.EDITED BY KELLEY HOLLANDReturn to top
OUT TO SPOIL A STOUT PARTY
HE GETS NO KICK FROM stout: Bernard Arnault, chief executive of France's LVMH Mot Hennessy Louis Vuitton, aims to play the spoiler in a $20 billion merger announced May 12 between Guinness and Grand Metropolitan. As Guinness' largest shareholder, LVMH had lobbied for a three-way alliance. Now shut out, Arnault is seeking to block the creation of GMG Brands, as the product of the two-way merger would be known. He aims to exercise his option from a 1994 deal with Guinness to buy distribution rights for Guinness in the U.S., France, and Asia for 10 years. Guinness and Grand Met may now move to thwart Arnault.EDITED BY KELLEY HOLLANDReturn to top