Nestle to buy Ralston Purina

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Nestle S.A. on Jan. 16 agreed to acquire Ralston Purina Co. for roughly $10.3 billion. Nestle and Ralston plan by year's end to combine their respective pet care businesses into a new entity, Nestle Purina Pet Care, which will have sales of approximately $6.3 billion. The new unit will be based in St. Louis and headed by Mr. W. Patrick McGinnis, current president-CEO of Ralston Purina.

While executives from the two companies said the merger would not prompt an agency review, it is likely that Interpublic Group of Cos. stands to gain from the transaction. Currently, IPG agencies McCann-Erickson Worldwide, Los Angeles and Dailey & Assoc., West Hollywood, Calif., account for the lion's share of Nestle's businesses, including pet care brands Friskies, Fancy Feast, Alpo and Mighty Dog. Nestle spent $52 million in measured media on those dog and cat food brands in 1999, per Competitive Media Reporting. Ralston, for its part, currently uses IPG agency Lowe, Lintas & Partners, Minneapolis, for its Purina O.N.E specialty pet food brand, on which it spent roughly $30 million in measured media in 1999, per CMR. Publicis Group's Fallon Worldwide and Avrett, Free & Ginsburg, New York, and an internal agency, CheckMark Communications, are among the other agencies that Ralston uses for its additional pet care brands, on which it spent $94 million in 1999.

- Stephanie Thompson

Copyright January 2001, Crain Communications Inc.

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