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Coke praised by investors for taking pass on Quaker

Coca-Cola Co.'s decision to pass on Quaker Oats Co. last week led to a sigh of relief on Wall Street. Despite expectations that Coke would announce on Nov. 22 its $15.6 billion acquisition of Quaker, the deal fell through on Nov. 21 due to concerns over antitrust issues with its existing Powerade brand, Quaker's high price and the danger of expanding into the food business, according to industry observers.

Although Jennifer Solomon, beverage analyst at Salomon Smith Barney called the coveted Gatorade brand "the ultimate prize," she acknowledged that, even though the brand would give Coke a leadership position in non-carbonated beverages, that alone wouldn't have made the buy worth it. Similar problems seem to exist for almost every potential bidder for various reasons. For French food and beverage player Group Danone, which confirmed its interest in acquiring Quaker because of the overall portfolio's fit with its health-oriented dairy, biscuit and beverage businesses, it is an issue of size.

"Group Danone is a $20 billion company trying to buy a $15 billion company with French ADRs [American Depositary Receipts] that don't trade at all easily," said Dave Nelson, analyst for Credit Suisse First Boston. Attesting to the difficulty of the potential deal, Danone's share price declined sharply based on the announcement. For Nestle, also rumored to be interested in Quaker, its joint venture with General Mills to make and distribute cereals outside the U.S. would complicate any possible Quaker deal.

Farley resigns from chief marketing post at Penney's

J.C. Penney Co. has begun a search for a new chief marketing officer to succeed Stephen Farley, who will leave the post Nov. 30. A Penney's spokeswoman said Mr. Farley "resigned to pursue other interests." Until a successor is named, Mike Boylson, director of marketing, planning and promotions, will handle the retailer's $200 million ad budget. The spokeswoman cautioned that Mr. Farley's departure didn't indicate Penney's account, awarded in April to DDB Worldwide, Chicago and Dallas, would go into review. Instead, she said, new Chairman-CEO Allan Questrom issued a statement expressing "appreciation for the firm's creative depth and talent." Penney's department store sales have fallen for three straight years. At a recent meeting with Wall Street investors, Mr. Questrom said "our marketing effort of late, however, has clearly worsened that trend." DDB's first campaign for Penney's broke in September and was tagged "It'sallinside." The Penney's CEO promised investors "major corrective changes in this area" starting next year.

SunCom moves house with new TV campaign

Regional wireless company SunCom-a member of the AT&T Wireless Networks-broke the TV portion of a new $6 million print and broadcast advertising campaign over the Thanksgiving holidays. Created by Margeotes Fertitta & Partners, New York, the two 30-second spots build upon SunCom's "We get it" theme. Titled "Moving House," the commercials show a traditional American home, complete with dog and white picket fence, traveling via flatbed across the South. The tagline: "Introducing the SunCom Welcome Home plan. Every call you make is a local call." SunCom is the brand name for Triton PCS's digital wireless network in the Southeast. The company is the first member of the AT&T Wireless Services network of affiliates to offer services in Virginia, North Carolina, South Carolina, Georgia and northern Tennessee, a network territory of over 13 million people. The campaign will air continuously until January in 30 southeastern markets.

Lucent narrows review for $25 mil account to two

Lucent Technologies narrowed its account review for Lucent Microelectronics Group, according to executives familiar with the review. Hill, Holliday, Connors, Cosmopulos, Boston and Mullen, Wenham, Mass., made the cut, while DDB Worldwide, New York, and The Martin Agency, Richmond, Va., were eliminated. Lucent is looking for an agency to handle the new $20 to $25 million advertising account. A decision is expected by December. Pile & Co., Boston, is the consultant in the review.

DaimlerChrysler confirms departures of three execs

DaimlerChrysler Corp., Auburn Hills, Mich., confirmed the immediate departures of three executives: Ted Cunningham, exec VP-global sales and marketing; Kathy Oswald, chief administrative officer; and Tony Cervone, VP-communications for the Chrysler Group. Mr. Cunningham, who joined in 1968, was instrumental in the company's $2.8 billion review. Daimler-Benz, Stuttgart, acquired Chrysler in 1998. Juergen Schrempp, chairman of German parent DaimlerChrysler AG, went to Auburn Hills last week to introduce staff to new DaimlerChrysler Corp. President-CEO Dieter Zetsche, a German succeeds American Jim Holden, who was forced out last week.

Verizon breaks ads focused on lifestyle

Verizon Communications, New York, focusing on everyday communications, broke a brand campaign last week in 20 markets. Verizon tapped Burrell Communications Group, Chicago, which normally handles efforts aimed at the African-American market, to create the general-market "Getting Life Done" campaign. Media include TV, print, outdoor and online ads depicting Verizon products and services, and how they fit into various lifestyles. Executions include a businesswoman trying to close a deal, a father who wants to read a bedtime story to his kids and a cattle rancher seeking to learn about market conditions. The tagline is "Verizon. How to get life done." The effort runs through mid-December. Early next year, advertising will focus on different customer segments. Verizon annually spends some $300 million in advertising. The telco's Hispanic agency, La Agencia de Orci & Asociados, Los Angeles, will run parallel executions targeting that market.

Ikea down to three for $35 mil N. America account

Ikea selected three finalists for its $30 million to $35 million North American account: Carmichael Lynch, Minneapolis; Martin Agency, Richmond, Va.; and Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York. The Plymouth Meeting, Pa., furniture retailer had been with Deutsch, New York. Pile & Co., Boston, is handling the review. A decision is expected by year-end.

Hoffmann-La Roche's Tamiflu gets FDA boost

Hoffmann-La Roche received a boost when the U.S. Food & Drug Administration cleared the use of its Tamiflu drug for the prevention of the flu; the drug had previously been approved to treat the flu only after a person contracted the illness. Tamiflu was heavily advertised to consumers last winter in a head-to-head battle with Glaxo Wellcome's Relenza.

Y&R Advertising, New York, handles the current account. It was unclear whether the new indication would impact Roche's ad plans for this winter; a call to a spokesman was not immediately returned.

MB Group invites pitches for 2001 margarine launch

Finnish foods group MB Group will invite agencies to pitch early next year for Multi-Bene, a cholesterol-reducing margarine the company plans to launch in the U.S. and Europe in the first quarter of 2001. No ad budget was disclosed.

Multi-Bene will compete in markets dominated mainly by Unilever and Finnish company Raisio, which launched its cholesterol-reducing margarine product Benecol in 1996. Product trials were conducted among test groups in 100 countries during 1999, with the biggest trials taking place in the U.S. and Turkey.

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