NEW YORK -- Nabisco Inc. and Standard Brands Inc., two of the nation's major food companies, have agreed to merge under a new corporation called Nabisco Brands Inc.
The two companies jointly announced Wednesday they had signed a definitive merger agreement involving a tax-free stock conversion valued at about $1.9 billion.
Both companies will maintain their separate identities but their operations would be combined under the new corporation. In 1980, the two companies had combined sales of $5.5 billion, net income of $232 million and 62,000 employees.
The transaction has already been approved by directors of both companies, but is still subject to certain regulatory clearances and stockholder approval, Special stockholder meetings are expected to be scheduled for this summer.
Under terms of the agreement, each share of Nabisco stock would be converted into 1.04 shares of Nabisco Brands and each share of Standard Brands would be converted into 1 share of Nabisco Brands.
Robert M. Schaeberle, the 58-year-old chief executive officer of Nabisco, will become chairman and chief executive of Nabisco Brands. F. Ross Johnson, 49, chief executive of Standard Brands will become president and chief operating officer as well as the chairman of the board's executive committee of the new corporation.
Schaeberle said the product lines and international operations of each organization are complementary. Standard Brands is well established in the United Kingdom, Latin America, Holland and southern Europe while Nabisco is strong in Japan, Italy, France, Australia and New Zealand, he said.
The new company will be jointly marketing in 100 countries such products as Nabisco's Premium Saltines, Ritz Crackers, Oreo Cookies and Nabisco Shredded Wheat, along with Standard Brands' Planters Nuts, Fleischmann's Margarines, and Baby Ruth and Butterfinger candy bars.
Nabisco Brands will be headquartered in the metropolitan New York area. Nabisco, based in East Hanover, N.J., and Standard Brands, located in New York, will also maintain their current headquarters.
The companies anticipate that the initial annual rate of dividends to be paid by Nabisco Brands will be $1.85 a share. In addition, it is currently anticipated that the $3.50 cumulative preferred stock of Standard Brands would remain outstanding and unaffected by the transaction.
