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GRANDMET MAKES L359 MILLION DAIRY DISPOSAL

 GRANDMET MAKES L359 MILLION DAIRY DISPOSAL
 MINNEAPOLIS, Nov. 20 /PRNewswire/ -- Grand Metropolitan PLC


(NYSE: GRM) announced today that having reviewed its long-term growth prospects in the UK and Irish dairy industry and likely changes in the industry's milk supply arrangements, it has decided to reduce its dairy interests and to concentrate on more strongly branded segments of the food industry.
 As a first step, GrandMet has entered into an agreement to sell to Northern Foods PLC for L359 million, its Express Dairy liquid milk business and its Eden Vale chilled products business, which includes Thayers ice cream and the Coldstream distribution operations. Separate talks are taking place with various parties regarding Express Ireland, which manufactures cheese, milk and cream products. GrandMet's plans for the Express Foods cheese and foodservice business in the UK will be determined in the light of further clarification of the milk marketing scheme.
 The agreement with Northern Foods, which is expected to be completed at the end of December 1991, is subject to the approval of Northern Foods shareholders, the Northern Foods rights issue becoming effective, and clearance from the Office of Fair Trading. Northern Foods will pay cash to Grand Metropolitan of L326 million and will assume indebtedness and certain obligations amounting to L33 million. The proposed sale of the Express units includes dairies located at Ruislip, Morden, Cricklewood, Thornbury, Exeter and Crediton, all in the UK, and factories at Staplemead, Minsterley, Cuddington, Milborne and Cardiff, also in the UK.
 In the year ended Sept. 30, 1991, the activities being sold represented contributions to GrandMet's group turnover of L571 million and to trading profits of L34.8 million (after deducting an allocation of central costs). Their net assets (after deducting indebtedness and obligations being assumed) amounted to L97 million at Sept. 30, 1991, and after making provisions for taxation and other obligations arising on the disposal, the transaction will increase GrandMet's shareholders' funds by around L200 million. The effect on GrandMet's earnings in the current year will be neutral.
 Ian Martin, chief executive of GrandMet's Food Sector, (and also group managing director and chief operating officer of Grand Metropolitan PLC) commented: Express has had an excellent track record over recent years and consists of well-managed businesses. Those sold to Northern Foods will benefit from becoming part of a larger dairy group. Northern Foods will take responsibility on present terms for all the staff in the businesses involved. This agreement represents an important strategic step for both GrandMet and Northern Foods."
 Grand Metropolitan PLC, one of the largest international companies in the United Kingdom and a world leader in drinks, retailing and food, has sales of more than $17 billion. US subsidiaries include ALPO Petfoods, Burger King, Carillon Importers, Haagen-Dazs, Heublein, The Paddington Corporation, Pearle, Inc., Pillsbury, and GrandMet Foodservice USA.
 -0- 11/20/91
 /CONTACT: Mary Carroll of Grand Metropolitan, 612-33-4805/
 (GRM) CO: Grand Metropolitan ST: Minnesota IN: FOD SU:


AL -- MN006 -- 5356 11/20/91 10:59 EST
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Publication:PR Newswire
Date:Nov 20, 1991
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