P&G, whose brands also include Pringles, Crisco and Jif, said the deal with Boca Raton, Fla-based Brothers, which filed for Chapter 11 of Bankruptcy Protection in August 1998, is expected to close on April 30.

Under terms of the deal, which includes $21.5 million cash and $1.3 million of Brothers' liabilities, P&G will gain portions of Brothers' inventory, accounts receivable, in-store equipment and other contracts. But Brothers' plant site in Houston, Texas, and its headquarters in Boca Raton are not included in the purchase, sources in P&G said.

Brothers, with gross sales last year of about $57 million, sold its coffees mainly in the US Northeast, Southeast and Denver areas. Brothers said in a separate statement the companies reached another agreement thatcalls for P&G to pay Brothers $2.4 million in excess of the latter's production costs to roast, package and ship nine million pounds of coffee during the 12 months following the close.

Brothers said its debtors will keep ownership of all of their roasting and packaging assets located at the Houston manufacturing facility and will continue to operate the plant during the agreement while looking for a facility buyer.

The company said the debtors do not believe that the combined proceeds from the sale of assets and the anticipated proceeds from the disposition of the Houston facility will be sufficient to repay all of their indebtedness. The company said it is, therefore, not expecting to make any distributions to Brothers stockholders.