Borden Agrees to Be Acquired by KKR : Merger: The food and dairy giant and Kohlberg Kravis Roberts sign a definitive pact for the $2-billion deal.

Food and dairy giant Borden Inc., brushing off last-minute overtures from financier Paul Kazarian, said Friday that it has signed a definitive merger agreement under which it will be acquired by buyout firm Kohlberg Kravis Roberts & Co. for about $2 billion in stock.

Under the $14.25-a-share deal, KKR would pay for Borden with stock in food and tobacco firm RJR Nabisco Holdings Corp., which KKR took over five years ago in a record $25-billion buyout.

“This merger is the best alternative for Borden shareholders,” Borden Chairman Frank Tasco said.

Borden said, however, that its board would still be obligated to consider other credible offers. Kazarian has expressed an interest in the Columbus, Ohio-based company.

The KKR deal would link companies with two of the best known corporate symbols--Borden’s Elsie the Cow and RJR’s controversial Joe Camel figure advertising cigarettes.

Not everyone is toasting the betrothal. Borden shareholders have filed two class-action lawsuits in a last-ditch effort to block the merger, contending Borden is worth more than KKR is offering in RJR stock.

Some major Borden shareholders have also objected to the KKR offer, among them spokesmen for the International Brotherhood of Teamsters and the City of New York, whose pension funds own Borden stock.

The merger also faces a challenge by investor Kazarian and his Rhode Island firm, Japonica Partners. Kazarian has expressed an interest in mounting a bid for Borden but has not outlined financing details.

“Financing shouldn’t be an issue,” he said when asked about financial backing in an interview on CNBC Friday, referring to his record in previous deals.

Borden met on Wednesday with Kazarian, who expressed an interest in buying the company for $16 to $18 a share but did not make a concrete proposal.

Borden’s products range from Cracker Jack candied popcorn to Elmer’s glue, Eagle Brand condensed milk with the famous Elsie label, Borden and Meadow Gold dairy products, Wise snack foods and Creamette pasta.

Borden has been struggling with weak earnings. In January, it launched a restructuring aimed at selling off weak units and turning its profits around. Borden posted a restated loss for 1993 of $631 million, or $4.47 a share. Its dairy operation alone lost $35 million in 1993.

For KKR, the deal would be its biggest since RJR Nabisco. It also would cut the investment firm’s holdings in food and tobacco giant RJR in half to $2 billion.

Borden shares eased 12.5 cents to $14 on the New York Stock Exchange Friday.