A deal has been approved by the board of RHM, which is responsible for brands including Bisto gravy, Hovis bread and Mr Kipling cakes.
It is believed the merged company will have annual sales of £2.6bn, with 93% of those revenues coming from the UK. Premier will pay a mixture of cash and new shares in a deal that values RHM stock.
Premier said it would pay one new share and 83.2 pence in cash for each RHM share, working out at about 352.45p for each RHM share. The shareholders of both companies have yet to approve the deal.
"This acquisition provides a unique opportunity to combine two of the UK's leading food companies," Premier chairman David Kappler said.
The acquisition will see the following brands come under one umbrella: Bisto, Oxo, Hovis, Mother's Pride, Mr Kipling, Lyons, Ambrosia, Bird's, Robertson's Jam, Golden Shred, Smash, Crosse & Blackwell, Branston, and