Kellogg Company acquires United Bakers Group

Kellogg Company, the world's leading producer of cereal and a leading producer of biscuits and convenience foods, announced that it has acquired The United Bakers Group, one of Russia's largest cracker, biscuit and breakfast cereal producers. United Bakers' products, marketed primarily under the Yantar and Lyubyatovo brands, are a strong strategic fit with the Kellogg portfolio. The brands hold number one or number two positions in their respective categories.

Terms of the transaction were not disclosed. With United Bakers' 2007 net sales of approximately $100 million, the transaction is not expected to have a material impact on Kellogg Company's 2008 operating profit.

"Consistent with our strategy, we continue to pursue the right kind of opportunities to grow our business," said David Mackay, president and chief executive officer, Kellogg Company. "The acquisition of United Bakers in Russia is an exciting strategic development for Kellogg. United Bakers is a leading producer of high quality cereals and biscuits, and its existing operations will help us establish a considerable presence in this large and fast-growing market."

United Bakers' nearly 4,000 employees will join Kellogg Company, including the company's management team. The acquisition includes United Bakers' six manufacturing facilities located throughout Russia as well as its large sales and distribution network. The business will continue to be headquartered in Voronezh, Russia, and will report into Kellogg Company's European business unit.

Kellogg will leverage its brand building and innovation expertise, its understanding of the cereal and biscuit categories, as well as United Bakers' existing manufacturing, sales and distribution infrastructure, to drive continued strong growth of this business.

With 2006 sales of almost $11 billion, Kellogg Company is the world's leading producer of cereal and a leading producer of convenience foods, including biscuits, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles and veggie foods. The company's brands include Kellogg's, Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Special K, Rice Krispies, Murray, Austin, Morningstar Farms, Famous Amos, Carr's, Plantation, Ready Crust and Kashi. Kellogg products are manufactured in 17 countries and marketed in more than 180 countries around the world.