FTC Request for Data Cancels Pepsico Plan to Buy Bottling Firm

BOSTON —  Pepsico Inc.’s $1.5-billion acquisition of General Cinema Corp.’s soft-drink bottling business has collapsed because of a government request for more information about the deal, the companies said today.

One of the most expensive bottling transactions ever proposed fell apart Friday when the Federal Trade Commission asked for additional details to determine whether it might violate antitrust laws, the companies said.

Under the agreement signed by General Cinema and Pepsico on Nov. 30, the deal was contingent on a 1988 closure for tax reasons.

Had the deal succeeded, it would have brought one of the nation’s biggest independent bottlers under Pepsi’s control, allowing the soft-drink giant to consolidate bottling operations and reduce costs, industry analysts said.

General Cinema and Pepsico officials said this morning that they will confer later this year about a possible deal. Industry analysts said any new agreement could be less beneficial for Pepsico and less lucrative for General Cinema.

Jim Griffith, a spokesman for Pepsico, said it is not fair to compare any deal made in 1988 with one that may be negotiated this year.

“It means of course the cost to Pepsico or the compensation to General Cinema will be decidedly different because Uncle Sam will have his hand in the till for more money,” said Roy D. Burry, a senior vice president at the Wall Street brokerage house of Kidder, Peabody Inc. “If a new deal is done, the parties will have to take a lot less or pay a lot more.”

“It was a disappointment because we had hoped to close last year,” said Griffith.

Peter Farwell, vice president of General Cinema, said the FTC’s move was “not expected. The deal as it stood in 1988 is off,” he said.

General Cinema, a film exhibition and soft-drink bottling concern based in Chestnut Hill, Mass., owns about 60% of the Neiman Marcus Group, which consists of Neiman Marcus, Bergdorf Goodman and Contempo Casuals stores. General Cinema also has owned about 18% of the stock in Cadbury Schweppes PLC since 1986, company officials said.

The company’s beverage unit had revenues of about $720 million for the fiscal year that ended Oct. 31.