Benzinga | Sep 27, 2021 11:13AM EDT

This Day In Market History: Philip Morris Acquires General Foods

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened: On this day in 1985, Philip Morris announced a $5.75-billion buyout of General Foods.

What Else Was Going On In The World: In 1985, the popular comic strip "Calvin and Hobbes" debuted. Route 66 was officially removed from the U.S. Highway System. The year-end fed funds interest rate was 10.75%.

General Foods Acquisition: Philip Morris announced a buyout of General Foods at a price of $120 per share on Sept. 27, 1985. At the time, the deal's price tag of $5.75 billion made it the largest takeover in U.S. history outside of the oil industry.

General Foods was founded back in 1895 by C.W. Post as Postum Cereal Company. In 1897, the company developed its first cereal, Grape-Nuts.

When the 1985 buyout deal was announced, many Philip Morris investors were angry the company was diversifying away from tobacco and into the slow-growing processed food business.

Philip Morris' venture into processed foods did not end there.

In 1988, Philip Morris also acquired Kraft Foods and merged it with General Foods. Philip Morris rebranded itself as Altria Group Inc (NYSE:MO) in 2003.

Several years later, Altria ended its experiment in the food industry.

In 2007, the company spun off its 88.1% ownership stake in Kraft Foods and its ownership of Philip Morris International Inc. (NYSE:PM).

In 2015, Kraft Foods merged with H.J. Heinz company to form Kraft Heinz Co (NASDAQ:KHC).