98% of Kraft Shares Tendered in Buyout, Philip Morris Says

Philip Morris Cos. said Monday that it has nearly completed its $12.9-billion buyout of Kraft Inc. and the creation of the world’s largest consumer products company.

About 98% of Kraft’s shares outstanding, or more than 117 million shares, had been tendered under Philip Morris’ $106-a-share cash offer that expired Friday, according to the tobacco and consumer products giant.

Philip Morris said it planned to complete the acquisition as soon as possible but offered no date.

The merger is one of a series of recent huge deals in the food business, capped by RJR Nabisco Inc.’s agreement last week to be acquired by the investment firm Kohlberg Kravis Roberts & Co. for nearly $25 billion.

Philip Morris’ tender offer was about 77% higher than the $60 a share that Kraft stock was trading at before the takeover plan was disclosed in mid-October.

Surpassing Unilever

Philip Morris initially offered $90 a share. But Kraft rejected that as inadequate and proposed a recapitalization plan that it valued at $110 a share, including a cash dividend of $84 a share.

By late October, however, the two companies signed an agreement under which Philip Morris agreed to pay $106 a share in cash for all of Kraft’s stock.