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Shareholders OK Guinness Merger

November 28, 1997

LONDON (AP) _ Shareholders of beer maker Guinness PLC and Grand Metropolitan PLC, owner of Burger King and Haagen-Dazs, have approved a merger between the companies.

The deal creates the world’s seventh-biggest food and beverage company with a combined market value of about $36 billion. Shares of the larger company begin trading on Dec. 17.

There is no purchase price for the deal because stockholders of both companies will exchange each of their shares for one share in the merged company. The two conglomerates had previously announced the merged group would be called GMG Brands, but said on Oct. 29 they had settled on the name Diageo.

A few shareholders at Wednesday’s meeting complained the merger would allow both companies to eliminate jobs.

On Oct. 15, the European Union’s executive agency cleared the way for the firms to merge after the companies agreed to shed some brands in Europe.

The new company would put under one corporate roof well-known Guinness brands such as Guinness Stout, Gordon’s gin, Johnnie Walker and Bell’s Scotch whiskies and Grand Met’s Burger King, Bailey’s Irish Cream, Haagen-Dazs ice cream and Pillsbury baked goods.

But to gain EU approval for the merger, the two agreed to sell two Scotch whisky brands, Dewar’s and Ainslie’s, ``on a Europe-wide basis,″ the Commission said. Its ruling did not address Dewar’s market position in the United States.

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