CPC INTERNATIONAL INC. ACQUIRES $1.2 BILLION BAKING BUSINESS FROM KRAFT FOODS, INC.

ENGLEWOOD CLIFFS, N.J.--(BUSINESS WIRE)--August 7, 1995--CPC International Inc. today announced that it has reached agreement with Kraft Foods, Inc., a wholly-owned subsidiary of the Philip Morris Companies Inc., to acquire its $1.2 billion in sales, nationwide baking business for $865 million. The business to be acquired includes four major market-leading brands: Entenmann's sweet baked products, Freihofer's and Oroweat breads, and Boboli Italian bread shells. Entenmann's is the 14th largest food brand in the United States by dollar sales.

CPC will combine the acquired business and its Best Foods Baking Group, which markets such premium products as Thomas' English muffins; Arnold, Brownberry, and Bran'nola breads; and Sahara pita bread. With the acquisition, CPC's sales of specialty baking products will total approximately $1.7 billion, making the company the largest producer of fresh premium bakery products in the United States. The acquisition will also significantly strengthen the presence of CPC's consumer foods business in the U.S. grocery business; among other benefits it will give CPC one of the best nationwide direct store delivery systems.

C. R. Shoemate, chairman and chief executive officer of CPC, said, "The addition of the these leading brands -- Entenmann's, Freihofer's, Oroweat, and Boboli -- is an excellent deal for CPC's shareholders. First, these businesses will provide a very good return on our investment. The acquisition is non-dilutive, adding to CPC's earnings per share from the start. Second, we expect to increase our baking business profits year after year as we realize synergies from combining the acquired business and our Best Foods Baking Group. One key benefit, for example, will be the efficiencies gained through the combined route delivery system, which as a nationwide network will provide additional geographic opportunity for all our bakery products.

"Third, we are confident that we can further increase sales and profits from all of our baking brands by continuing the strong record of successful product innovation the acquisition brings to us, particularly in the reduced-fat and fat-free product segments. Fourth, this acquisition will provide important additional cash flow that will fuel growth not only in baking but also in other parts of CPC's worldwide business. And last but not least, these are delicious, high quality products that have won enormous consumer loyalty and will inspire great enthusiasm and energy within CPC."

Mr. Shoemate added, "We will ensure that CPC's greatly enlarged baking business receives the strongest possible management attention by creating a separate baking division. Bernard H. Kastory, a corporate vice president and member of CPC's corporate strategic council as well as president of our Corn Refining Business, will head a transition team including John J. Langdon, president of CPC's Best Foods Baking Group, and the leadership of Kraft's baking business. We are determined to achieve the expected synergies very quickly, while allowing our other top management to continue focusing on our other major businesses."

The largest market of the business to be acquired is the Northeastern United States; its other significant markets are the Midwest, Southeast, and West. Operations include 16 bakeries, one of which is located in the U.K.; an apple processing facility; and a research and development facility. The business currently employs about 9,000 people.

CPC's Best Foods Baking Group operates seven plants and employs about 2,000 people.

The acquisition is targeted to close on October 2.

ABOUT CPC INTERNATIONAL: CPC International Inc. is among the largest U.S. food companies and ranks as one of the 100 largest industrial companies in the U.S., with sales prior to this acquisition of about $8 billion in the current year. In 1994, consumer foods accounted for 84% of the company's total sales. Best known among CPC's U.S. products are: Hellmann's and Best Foods mayonnaise, Mazola corn oil and margarine, Skippy peanut butter, Thomas' English muffins, Arnold breads, Mueller's pasta products, Karo syrup, and Knorr soups, sauces, and bouillons. Deriving more than 60% of its sales from operations outside the U.S. in 1994, CPC is one of the nation's most international food companies. CPC is also one of the largest corn refiners, with operations in North America and Latin America. Worldwide, CPC International has operations in 60 countries.

CONTACT: CPC International Inc., Englewood Cliffs

Gale Griffin, 201/894-2407 (media contact) or,

John W. Scott, 201/894-2837 (analyst contact)