Cannon Throws in Towel, Sells Bath, Bedding Units

Fieldcrest Mills Inc. has purchased the bath and bedding operations of Cannon Mills Co., which employs nearly 13,000 workers, for $250 million, company officials said today.

Under the purchase agreement, Fieldcrest will acquire Cannon’s towel, sheet and bedding accessory, kitchen product and rug businesses and retail stores that employ 12,900 workers in 12 plants and 14 sales offices, company officials said.

“It is certainly with mixed emotions that I sign this agreement,” said David H. Murdock, chairman and owner since early 1982 of Cannon Mills, which is based in Kannapolis.

Murdock and Joseph B. Ely II, chairman and chief executive officer of Fieldcrest, jointly announced the purchase agreement.

“The people of Cannon are like family to me. I have been impressed with the great enthusiasm and dedication demonstrated for the company and its management by Cannon employees,” Murdock said.

The closing of the sale is scheduled for mid-January. Fieldcrest will pay $220 million in cash and also provide a promissory note of $30 million.

Annual sales of Cannon’s bath and bedding products have been $500 million to $600 million in recent years. In 1984, Fieldcrest, based in Eden, N.C., reported sales of $573 million.