Kraft Foods Agrees to Sell U.K. Desserts Business to Premier Foods plc

NORTHFIELD, Ill.--(BUSINESS WIRE)--Dec. 9, 2004--Kraft Foods Inc. (NYSE:KFT), a global leader in branded food and beverages, announced today that it has reached an agreement to sell its U.K. desserts business to Premier Foods plc, a leading U.K.-based supplier of ambient grocery products for $135 million. The proposed sale includes the Bird's, Angel Delight and Dream Topping brands, which generated 2003 annual revenues of $72 million.

The transaction, which is subject to required approvals, is expected to close in the first quarter of 2005 following completion of necessary employee consultation requirements.

"As we continue to transform our portfolio as part of our Sustainable Growth Plan, we are focusing on larger-scale businesses where we can achieve sustainable competitive advantage," said Thibaud de Saint-Quentin, Vice President and Area Director of Kraft's U.K. & Ireland businesses. "The desserts business, which is geographically concentrated in the U.K. and Irish markets, is better aligned with a manufacturer such as Premier Foods that has a strategic focus on the desserts category."

Following completion of the sale, desserts production will transfer within a period of 12 months from Kraft's manufacturing facility in Banbury, U.K. to Premier. Approximately 120 employees at the Banbury plant will be affected by the sale. The company will be discussing with employees and their union representatives ways to support those affected by the announcement as part of the consultation process, including offering fair severance packages, where applicable, to affected employees.

Kraft's soluble coffee operations at the Banbury plant are unaffected by the proposed sale.

Kraft Foods markets many of the world's leading food brands, including Kraft cheese, Jacobs and Maxwell House coffees, Nabisco cookies and crackers, Philadelphia cheese, Oscar Mayer meats, Post cereals and Milka chocolates, in more than 150 countries. In the UK, the company's brands include Terry's Chocolate Orange, Terry's All Gold and Toblerone chocolates, Kenco and Maxwell House coffees, Philadelphia cheeses and Dairylea snacks as well as Kraft salad dressings.

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