ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, September 5, 1996 TAG: 9609050089
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
Rubbermaid to buy baby-product maker
WOOSTER, Ohio - Rubbermaid Inc., already trying to contend with a restructuring and rising costs for raw materials, announced expansion plans Wednesday, saying it would buy Graco Children's Products Inc. for $320 million.
Rubbermaid makes and sells plastic and rubber housewares, health care products, office furniture and Little Tikes toys. Its stock fell sharply after the announcement to $22.871/2 a share, down $3.621/2 on the New York Stock Exchange.
Graco makes strollers, playpens, walkers and other products for babies and toddlers. Its sales this year are expected to total about $270 million.
Rubbermaid announced a two-year restructuring in December, when it took a $158 million charge against earnings. The plan included a 9 percent cut in staff, or about 1,260 jobs, and the closing of nine facilities.
Including the charge, Rubbermaid earned $59 million, or 38 cents a share, on sales of $2.3 billion in 1995. But it said earnings will be held back by a 50 percent increase in plastic resin prices over the last five months.
Rubbermaid expects the deal, financed through short-term debt, to close by Oct. 31. The privately held Graco, based in Elverson, Pa., is owned by AEA Investors and management.
- Associated Press
Bristol-Myers to pay in price-fixing suit
ST. PAUL, Minn. - Bristol-Myers Squibb Co. agreed to pay Minnesota $5 million to settle claims that it colluded with other companies to raise the price of infant formula.
``Regardless of price, babies must eat and parents must feed them. That's why price-fixing of this product is so harmful,'' said Attorney General Hubert Humphrey III in announcing the deal.
Bristol is the parent company of Mead Johnson & Co., which makes Enfamil infant formula.
The settlement is the latest in a series as infant formula makers try to put behind them years of litigation accusing them of conspiring to raise their prices and stave off competition. Similar price-fixing cases were filed against Bristol and another formula maker, Abbott Laboratories, in 17 states. Abbott agreed in May to pay $32.5 million to settle all 17 suits against it.
Minnesota contended prices for formula increased 130 percent between 1980 and 1993, while the price of milk fell 6 percent.
Assistant Attorney General Carol Bennett said the state had evidence that the two companies signaled to each other when they were about to raise their prices. ``They increased the prices in a lock-step fashion over the period of the lawsuit, from 1980 to 1992,'' she said.
Bristol and Mead Johnson admitted no fault in the settlement. Formulas covered under the agreement are Similac, Enfamil, Isomil, Prosobee, Nutramigen, Pregestimil, Alimentum and Advance.
- Associated Press
LENGTH: Medium: 59 linesby CNB