Prepared Foods November 22, 2004 enewsletter

The Wm. Wrigley Jr. Company announced it has entered into an agreement to purchase certain confectionery assets of Kraft Foods for $1.48 billion. The transaction includes ownership of well-known, iconic brand franchises -- such as Life Savers, Creme Savers, and Altoids -- as well as a number of local or regional brands and production facilities in the U.S. and Europe.

"There are only a handful of confectionery brands around the world that have the combination of heritage and vitality that can match up with Wrigley brands," commented Bill Wrigley, Jr., chairman, president & CEO. "Altoids and Life Savers are two such brands. We are extremely pleased to add them to our fast-growing and dynamic portfolio of leading confections and are committed to leveraging their equity to create significant value for our business and our shareholders. With our confectionery focus and expertise, we look for these brands to flourish under the Wrigley umbrella and anticipate being able to take full advantage of their marketplace potential."

Peter Hempstead, senior vice president -- Worldwide Strategy & New Business, added, "The addition of these high-quality brands will align perfectly with our key strategic business choices. Specifically, this acquisition will:

-- provide additional diversification in key categories of mints and hard and chewy candy, expanding the portfolio we offer to our customers and consumers worldwide;
-- strengthen the company's overall position in the world's largest confectionery market;
-- add scale and brand depth to an already robust innovation pipeline; and
-- increase efficiency across our confectionery supply chain."

As noted, the purchase price will be $1.48 billion, offset in part by approximately $300 million in cash tax benefits associated with amortization of intangible assets. The net acquisition cost of $1.18 billion represents 2.4 times estimated 2004 sales. In order to complete this all-cash transaction, the Wrigley Company has received a commitment for a credit facility of $1.5 billion that, even when fully utilized, will leave the company with a modest debt-to-market capitalization ratio. This transaction, including one-time costs, is expected to be slightly dilutive to earnings in the first full year of combined operations and accretive thereafter.

Key brands involved in the transaction, including where and in what format they are sold, are detailed below:

Life Savers in North America -- Hard and gummi candies, lollipops
Creme Savers in North America -- Hard and soft candies
Altoids in North America -- Mints, sours, gum
Others include Sugus in North America -- Fruit chews, gummi candies; and Trolli in
Portugal, Romania, Spain, Indonesia and Thailand - gummi candies, pastilles and mints

Noted Ron Waters, chief operating officer, "We see the addition of these strong brands and confectionery expertise as a great strategic fit that will complement and enhance the already excellent organic growth of current Wrigley products. This is the next step in more fully leveraging our robust sales, marketing and innovation infrastructure to become a broader-based confectionery company and to weave our brands even deeper into the fabric of everyday life around the world."

The proposed acquisition is subject to customary closing conditions, including certain regulatory clearances. The Wrigley Company will make all appropriate filings with the relevant U.S. and overseas authorities in the coming weeks; and subject to receiving those clearances, the transaction is expected to be completed by mid-2005.