Philip Morris to Take Over General Foods

General Foods Corp. said Friday that it has agreed to be taken over by Philip Morris Cos. Inc. for about $5.7 billion, to form the nation’s biggest consumer products company.

Under the agreement to undertake the largest non-oil acquisition in corporate history, the tobacco giant will buy all of General Foods’ 47.3 million shares at $120 per share in cash.

The merger is subject to the approval of both firms’ boards of directors.

Hamish Maxwell, chairman and chief executive officer of Philip Morris, and James L. Ferguson, who holds the same titles at General Foods, said they will recommend that their boards approve the merger at meetings on Monday.

General Foods, which makes such products as Jell-O, Kool-Aid, Post cereals and Maxwell House coffee, plans to operate as a separate company in the Philip Morris empire and to maintain its headquarters in Rye Brook, N.Y., the companies said.

After General Foods announced last week that it had received an offer from an unidentified suitor to begin takeover negotiations, its stock soared $16.62 1/2 a share Tuesday, an additional $5.25 on Wednesday and $3.50 more Thursday to close at $110.25.