Business|PHILIP MORRIS TO BUY GENERAL FOODS FOR $5.8 BILLION
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By Robert J. Cole
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September 28, 1985
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Section 1, Page
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The Philip Morris Companies, the nation's biggest cigarette maker, has agreed to buy the General Foods Corporation, one of the country's biggest food producers, the two companies announced yesterday.
Philip Morris will pay General Foods' stockholders almost $5.8 billion in cash, making the merger the costliest in history outside the oil business.
The combination is the latest in a succession of food-company acquisitions: The lure, as consumers become increasingly eager for convenience foods, is established brand names. General Foods, for example, makes Jell-O, Maxwell House coffee and Birds Eye frozen foods.
The trend also reflects the desire of tobacco companies to diversify into other consumer products because of the pressures that health questions are putting on their cigarette business.
The Philip Morris-General Foods merger will create the nation's largest consumer product company, displacing a similar combination formed only last summer when R. J. Reynolds agreed to buy Nabisco Brands. Previously, Procter & Gamble had occupied the top spot.
Other big mergers involving household brands were Nestle's acquisition of Carnation last year and the Beatrice Companies' purchase of Esmark Inc.
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