Quaker, Kellogg may be eyeing merger

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Speculation spread across Wall Street the week of June 26 that Kellogg Co. executives were meeting with Quaker Oats Co. officials to discuss a possible merger. Analysts point to clear synergies between the two companies in cereal and in snack bars, but believe that Quaker's Gatorade business, from which it derives 40% of its profits, would be seriously diluted by the merger. Previously, speculation focused on the possibility that PepsiCo might acquire Quaker's food and beverage business.

Copyright June 2000, Crain Communications Inc.

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