Rumors of General Mills takeover by Nestle

7:37 PM, Apr 26, 2011   |    comments
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GOLDEN VALLEY, Minn.  --  From Wheaties to Betty Crocker, General Mills has built quite a name for itself in Minnesota and according to business rumors Nestle may be in line to purchase the company.

Sparking the speculation is General Mills' stock price which climbed to its highest level since June, the shares have climbed more than 7 percent this year. 

"There's been rumors in Wall Street going back a year or so that Nestle was interested in buying General Mills," said University of St. Thomas' Dr. David Vang.

Six times larger than the Cheerios maker, Nestle already works with General Mills to help distribute its cereal to 130 countries and experts say growing that relationship makes sense.

"Part of what Nestle is buying is the brand because it has so much name recognition and on net I think this might be good for Minnesota as I said Nestle is so much larger than General Mills there could be even more resources available," said Vang.

General Mills is often touted as one of the top companies in the country to work for with its family friendly benefits like flex time, child care on site and wellness programs, so what could potentially happen to the perks if there was a merger?

"It appears that General Mills has been highly profitable even with their generous benefit packages, probably a good example to look at would be General Electric," explained Vang. "They have acquired many companies over the years and it seems like their strategy frequently has been to let these companies that they acquire keep their benefit packages for a substantial amount of time before they start equalizing and consolidating."

Before anything can happen it all must be approved, right now the recipe for a merger comes with a strong dash of speculation.

(Copyright 2011 by KARE. All Rights Reserved.)

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