Sold, American

Having launched 20 new cigarette brands since he became president of the American Tobacco Co. in 1963, Robert Barney Walker has become known some what extravagantly as "Brand-a-Month Barney." While American has been concentrating chiefly on smokes, the rest of the industry has been on a merger spree, picking up products ranging from Chun King (Reynolds) to Clark Gum (Philip Morris). Now American is beginning to catch up with the trend, which began with the health scares of the late 50s, to ward profitable acquisitions as a hedge against poor cigarette sales prospects. Last May, American took over Sun shine Biscuits, Inc., the nation's second largest biscuit maker, in a $113 million stock swap. Last month it bought 96% control of Chicago's James B. Beam Distilling Co. for some $110 million. Two weeks ago, it agreed to buy 52.66% control of Buckingham Corp., which distributes Cutty Sark Scotch in this country, from Schenley for some $50 million. Last week Walker announced plans to buy prosperous Royal Crown Cola Co. in American's biggest deal yet.

If stockholders of both companies approve, American will take over Royal Crown in a $130 million swap, run it under present management. In contrast to American's $1.2 billion sales, which have risen hardly at all in the past six years, Royal Crown's sales have tripled to an estimated $64 million since 1960. And the third-ranked soft-drink company (after Coca-Cola and Pepsi) promises to keep on outpacing its parent-to-be.

It was somewhat surprising that Royal Crown, riding on the success of its best-selling Diet-Rite Cola, wanted to merge at all. The main reason is that American can provide the capital and international marketing know-how that Royal Crown needs in overseas markets in order to keep pace with the leaders. Royal Crown, moreover, is no stranger to tobaccomen. To build up its sales efforts abroad last June, the company hired as president of its international division Morgan J. Cramer, former chairman of P. Lorillard.

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