Monday, June 26, 2000
Philip Morris to buy Nabisco
The Associated Press
NEW YORK — Tobacco giant Philip Morris Companies announced Sunday it has reached an agreement to buy the nation's No. 1 cookie and cracker maker — Nabisco Holdings. Corp. — for almost $15 billion.
Philip Morris, the world's largest tobacco company, is already heavily into food with its Kraft Foods subsidiary. Philip Morris said the deal was for $55 a share.
The announcement ended a bidding war that had involved financier Carl Icahn as well as a venture of France's Danone SA and Britain's Cadbury Schweppes PLC.
Nabisco, which makes Ritz crackers, Oreo cookies and Life Savers candy, is 80.6 percent owned by Nabisco Group of Parsippany, N.J.
Nabisco Group confirmed the sale.
Dow Jones News Service quoted sources close to the deal as saying Philip Morris had agreed to pay $14.91 billion in cash for Nabisco Holdings plus assume about $4 billion in debt.
Nabisco Group also said Sunday that after shedding the Nabisco Holdings unit, what remained of the group would be sold to R.J. Reynolds Tobacco. Ironically, R.J. Reynolds Tobacco had been a subsidiary of the group — previously known as RJR Nabisco — before it was spun off last year as a separate publicly traded entity.
Mr. Icahn, the biggest individual shareholder in Nabisco Group at 9.6 percent, disclosed last Thursday in a federal filing that he had offered $28 a share for the company, or $8.3 billion.
Mr. Icahn, who had made three failed efforts to replace the Nabisco Group board over the past few years, goaded the board to put Nabisco Group on the market when he suggested in late March that he wanted to increase his stake in the company to 40 percent through a $13 a share offer.
On April 3, the board said it had authorized management to explore the sale of the company.
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