---
title: "Grand Metropolitan → Pillsbury"
url: "https://mahouse.world/ma-deals/grand-metropolitan-buy-pillsbury-1988"
type: "M&A deal"
year: "1988"
---

# Grand Metropolitan → Pillsbury

The British conglomerate Grand Metropolitan won Pillsbury — owner of Burger King, Green Giant and Häagen-Dazs — for $5.7bn in cash in December 1988, after a two-and-a-half-month hostile contest ended when a Delaware court struck down Pillsbury's poison pill.

A hostile bid, opened at $5.2bn and closed at $66 a share, for the owner of Pillsbury flour, Green Giant, Häagen-Dazs and Burger King.

- **Acquirer:** Grand Metropolitan (United Kingdom)
- **Target:** Pillsbury (United States)
- **Value:** $5.7B
- **Announced:** October 1988
- **Completed:** January 1989
- **Sector:** Consumer
- **Deal type:** acquisition

## Why it mattered

Grand Met was the world's largest liquor company, with Smirnoff, J&B and Baileys, and had been selling pubs and its InterContinental hotels; its stated aim was to become a world leader in foods and retailing as well as drinks. Pillsbury, a Minneapolis flour miller turned food and restaurant group, was vulnerable: its profit had fallen from $208m in 1986 to $69m in the year to May 1988, and its shares traded at $39 before Grand Met bid $60 a share, about $5.2bn, on 4 October 1988.

Pillsbury fought back: it kept a poison pill in place, planned to spin off the struggling Burger King chain, approached at least 15 companies in search of a white knight and argued it was worth $68 to $73 a share. Grand Met raised its offer to $63 on 11 December. On Friday 16 December the Delaware Chancery Court struck down key parts of the pill and invalidated the Burger King spin-off; on Sunday 18 December Pillsbury agreed to $66 a share in cash — a higher price that one analyst thought it had won by agreeing not to appeal. The falling dollar meant the extra $6 cost Grand Met little in sterling.

## What it left behind

Grand Met sold the Bennigan's and Steak and Ale restaurant chains, because US laws barred a liquor producer from also selling liquor to the public, and turned Pillsbury into a marketing company that contracted out production. Burger King, which it kept, was neglected under a string of chief executives. In 1997 Grand Met merged with Guinness to form Diageo, which concentrated on drinks: it agreed in July 2000 to sell Pillsbury to General Mills, a sale completed in 2001, and in December 2002 sold Burger King to a group led by TPG for $1.5bn, after cutting the price by almost $750m when a large franchisee went bankrupt. The Pillsbury brand is now marketed by General Mills for dough products and by Hometown Food Company for flour and baking goods. Winning in court fixed the price; it did not settle whether drinks, food and fast food belonged under one owner, and within fourteen years the food and restaurant businesses had all been sold again.

Source: https://www.latimes.com/archives/la-xpm-1988-12-19-mn-457-story.html