Assurances from Quaker Oats chairman Robert Morrison that the cereals and snacks giant will continue to go it alone in a rapidly consolidating sector have not quelled persistent rumours a merger with Kellogg is on the cards. Fresh speculation concerning a tie up between the two companies has dragged the Standard and Poor food index in the US out of the doldrums after a summer of profits warnings from top food retailers, high interest rates and slow consumer spending. "Any time there are consolidation issues, the whole group reacts," said one analyst. Even Campbell Soup stock rose, despite its reporting a 50% drop in fourth quarter earnings accompanied by a profits warning for the first quarter of fiscal 2001. The most obvious synergies from a Quaker Kellogg partnership are in the snack food sector. {{NEWS }}

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