Diageo Still Has a Hand in the Pantry :: Restaurant Supply Resource

Diageo Still Has a Hand in the Pantry

Though the spirits giant is trying hard to get completely out of the food business, Burger King and Pillsbury continue to weigh on it

The company that makes and distributes Smirnoff vodka, Guinness stout, and Johnnie Walker whisky doesn't suffer from a hangover. Rather, Diageo (DEO ) is recovering from past indigestion caused by its prior ownership of Pillsbury and Burger King.

Diageo has been trying to wash its hands of the food business for four years. Its first move was a stock and cash sale of Pillsbury to General Mills (GIS ) in 2001. And on Oct. 5, Diageo moved closer to that goal when the London-based outfit sold 49.9 million shares more shares of cereal giant General Mills for $45.20 per share. As part of its 2001 deal, Diageo had received 134 million shares of the Cheerios maker, which it has slowly sold over the years.

"Today's transaction represents one of the last steps on our strategic journey to build the world's leading premium drinks business," CEO Paul Walsh said on Oct. 5. Investors didn't seem to do much toasting, however, barely budging the stock up 23 cents, to close at $51.23 that day.

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Date Listed: 2004-10-11

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