Kellogg (K) - Get Kellogg Company (K) Report confirmed that it reached an agreement to acquire Keebler Foods( KBL) for $42 a share.

The purchase price would value the acquisition at $3.57 billion.

Kellogg said it reached an agreement with both Keebler and

Flowers Industries

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(FLO) - Get Flowers Foods, Inc. Report

, the majority shareholder of Keebler.

Kellogg, which expects to close the acquisition during the first quarter of 2001, will also assume Keebler's debt. Kellogg said the acquisition would create a food company with $10 billion in annual sales.