Philip Morris To Buy Nabisco

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. Phillip Morris said the Nabisco 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 issued a separate statement confirming the sale.

Dow Jones News Service quoted sources close to the deal as saying that 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. Nabisco Group said the price for that deal was $9.8 billion at $30 a share.