Jams and jellies maker J.M. Smucker Co. is expected to reach an all-stock deal later this week to acquire the Folgers coffee business from Procter & Gamble Co., The Wall Street Journal reported on its Web site Tuesday.

Folgers, which has been the No. 1 U.S. ground coffee brand, could bring a price tag of $2 billion or more, according to the Journal. The newspaper cited unidentified people familiar with the matter in reporting the expected sale.

P&G spokesman Paul Fox would not discuss the report.

"We do not comment on rumor and speculation," he said.

A message seeking comment was left after business hours at Smucker offices in Orrville.
Cincinnati-based P&G said last year that it was reviewing its portfolio and taking a look at businesses at the lower end of annual sales growth goals of 4 percent to 6 percent, prompting analysts to name Folgers as among those most likely to be sold.

The consumer products company said in January that it was seeking to separate Folgers into an independent company, a move that would allow P&G to avoid a big tax bill that would come with a sale.

Folgers has annual sales of $1.6 billion but has faced increased competition in recent years from Starbucks Corp. and other coffee-makers. The sale would nearly double the size of Smucker, which now has annual sales of about $2.5 billion and a market capitalization of about $3 billion.

Folgers dates to a 19th century California family business and was acquired by P&G in 1963. The brand has been expanded with gourmet and other specialty lines.

Smucker also did a major deal with P&G in 2002 when it acquired Jif peanut butter and Crisco shortening in an all-stock deal valued at nearly $1 billion.