MADISON, N.J. (AP) _ American Home Products Corp. is selling its food brands like Chef Boyardee, Jiffy Pop and Gulden's mustard to a private investment concern for about $1.3 billion.

The buyer is a company formed by Hicks, Muse, Tate & Furst Inc., a Dallas-based investment firm, and its food industry management affiliate C. Dean Metropoulos & Co.

They already own the Campfire Marshmallow and Ghirardelli Chocolate brands.

American Home, which has focused increasingly on pharmaceuticals and health care, has been looking for a buyer for its food business.

Under the agreement signed today, American Home Products will get $1.2 billion in cash and retain a 20 percent stake in American Home Foods.

Hicks Muse said the deal was valued at a total of $1.3 billion. The transaction is subject to regulatory approval.

American Home Foods is expected to have sales of approximately $1 billion in 1996.

The food business being sold include Chef Boyardee canned pasta, pizza mixes, and dinners, PAM cooking spray, Polaner fruit spreads and spices, Jiffy Pop popcorn and Maypo and Wheatena hot cereals.