Gen. Cinema To Sell Unit To Pepsico

Posted: January 14, 1989

General Cinema Corp. said yesterday it agreed to sell its soft-drink bottling business to PepsiCo Inc. for $1.75 billion in cash.

The company said it would have an after-tax profit of more than $1.1 billion on the sale. But General Cinema said it also will have to pay about $600 million in taxes on the sale.

General Cinema had agreed last year to sell the unit, which is the largest independent Pepsi bottler in the United States, to PepsiCo. The deal was scuttled because of tax concerns.

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Smithkline Beckman Corp. was the most actively traded issue on the New York Stock Exchange, with 2.5 million shares traded. The stock closed up $0.125 at $52.50. The Philadelphia pharmaceutical company continued to be regarded on Wall Street as a takeover candidate, especially because of lagging sales of its ulcer drug, Tagamet.

Average mortgage rates were up slightly this week in the Philadelphia area, according to Mortgage Reporting Service Inc. in Jenkintown. The fixed rate for a 30-year loan increased to 10.88 percent from 10.86 percent the week before. The one-year adjustable interest rate rose to 8.48 percent from 8.43 percent the previous week.

Both fixed and adjustable mortgage rates rose .01 of a percentage point nationwide this week, the Federal Home Loan Mortgage Corp. said. It said interest on fixed-rate loans increased to 10.81 percent this week, and adjustable-rate mortgages averaged 8.54 percent.

Shearson Lehman Hutton Inc., Wall Street's largest firm, said it would report a loss for the fourth quarter of 1988 because of bad investments in a troubled Texas bank. Shearson did not estimate the amount of the loss from devalued securities in MCorp of Dallas, but one stock analyst put it about $16 million. Shearson also said it would revise downward its profit for the first three quarters of 1988 by about $30 million because of previously reported accounting problems at The Boston Co., a subsidiary that caters to wealthy clients. That would leave its profit at about $110 million.

Bell Atlantic Corp.'s Chesapeake & Potomac Telephone Co. subsidiary received a contract with an estimated value of $221.3 million to $282.1 million for replacing parts of the federal government's phone system in the Washington area with a digital system.

Campbell Soup Co. agreed to sell its Mendelson-Zeller Co. subsidiary, of Fresno, Calif., for $4.9 million to Polly Peck International, a British food company. Mendelson-Zeller sells produce in the United States and Asia and had sales of $31 million in the first five months of this year.

Roy F. Weston Co., a West Chester environmental services firm, said net income for the 1988 fourth quarter would be lower than the 21 cents a share projected by most analysts who follow the company. Weston said production problems in its analytical laboratories and a low backlog in its technical- information management group were primarily responsible for the performance. In the 1987 fourth quarter, the company earned 23 cents a share.

Sun Co. raised the price it will pay for West Texas intermediate, the bench-mark grade of U.S. crude oil, by 50 cents a barrel to $17.25. Sun also raised the price it will pay for other grades of crude by 50 cents a barrel.

Japan's two biggest securities companies, Nomura Securities Co. and Daiwa Securities Co., said they are cutting their staffs by about 30 people each in the United States because they had found it difficult to earn money here after the October 1987 stock market crash. Daiwa reduced its U.S. payroll to about 370 people, while Nomura's U.S. staff is now 530.

The unemployment rate in the 12-nation European Economic Community declined to 10.1 percent in November, from 10.2 percent in October, said Eurostat, the EEC's statistical service. It estimated that 15.44 million people were unemployed in the EEC at the end of November, down from 15.49 million in October.

Sonoco Products Co. and Graham Engineering Corp. announced plans to form a new company to produce and sell blow-molded plastic bottles for a wide range of packaging needs. The two companies said they signed a letter of intent to set up the new company, which will have headquarters in York, Pa., and be known as Sonoco Graham. Sonoco is not connected with Sun Co. of Radnor.

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