Kellogg (K) - Get 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

(FLO) - Get 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.