Disposal

Diageo PLC
31 October 2001



                                                               31 October 2001



                      DIAGEO COMPLETES SALE OF PILLSBURY

Diageo announces that it has successfully completed the disposal to General
Mills of the worldwide operations of Pillsbury in a transaction valued at
$10.4 billion.

The transaction, originally valued at $10.5 billion, was announced on 17 July
2000. Diageo and General Mills have agreed to amend the original terms of the
transaction to reflect changes which have occurred since announcement.

In summary, the revised transaction value comprises:

      + 134 million newly issued shares of General Mills constituting
        approximately 32% of General Mills' enlarged issued share capital and
        valued at $44 per share representing $5,896 million

      + $3,830 million of cash and assumed debt

      + $670 million contingent value right (CVR). Diageo will receive some
        or all of the CVR at the eighteen month anniversary of completion to
        the extent that the average General Mills share price is lower than
        $49 over the 20 trading day period prior to the eighteen-month
        anniversary of completion. The maximum payment of $670 million will be
        made if the average share price over that same period is at or below
        $44. The amount paid will also be dependent on the number of General
        Mills shares Diageo holds at the eighteen month anniversary.

The transaction gives rise to a pro-forma exceptional gain of approximately £
400 million before transaction costs and tax and after charging goodwill
previously written off of £1.5 billion, based on current US dollar exchange
rates.

Diageo has negotiated an option to sell 55 million of its General Mills shares
back to General Mills within the next six days at a price of $42.14 per share,
which represents a 6% discount to the closing price on Friday 26 October 2001.
Diageo intends to exercise this option. The General Mills share price has
appreciated over the period since the transaction was announced and Diageo now
wishes to have the ability to sell some of its shareholding in General Mills.
The option which Diageo now has represents an attractive way to do this.

Diageo is committed to return capital to shareholders when circumstances are
appropriate and the sale of shares to General Mills at this time increases
Diageo's capacity to do so.

Following completion of the transaction Diageo will be able to participate in
the enhanced growth, cost synergies and shareholder value benefits which are
understood to accrue to the new General Mills. In the longer term, consistent
with its focus on premium drinks, Diageo will consider further reductions in
its holding in General Mills. However, such reductions will only be made when
they are also in line with Diageo's shareholder value principles and in full
collaboration with General Mills.

As a result of additional tax planning and structural rearrangements Diageo's
estimated tax liability for the disposal of Pillsbury is now considerably
lower at $300 million.

Commenting on the announcement, Paul Walsh, Group Chief Executive of Diageo,
said:

'This is an important milestone for all those involved. Bringing together
Pillsbury with General Mills offers the combined company a richly exciting
future.

'For Diageo this marks the moment when we can become more sharply focused on
premium drinks. We believe that this focus gives us excellent top and bottom
line growth prospects and will position us to deliver outstanding value to our
shareholders.'



For further information
Media enquiries to:     Kathryn Partridge    + 00 44 (0) 20 7927 5225/5967
                                             [e-mail]
Investor enquiries to:  Catherine James      + 00 44 (0) 20 7927 5272
                                             [e-mail]
                        Kelly Padgett        + 00 (1) 202 715 1110




Notes

In the announcement of the transaction, made on 17 July 2000, values were
based on the $38 average closing General Mills share price on the New York
Stock Exchange over the previous month.

Values throughout this announcement are based on the $44 average General Mills
closing share price on the New York Stock Exchange over the past month.

Advisors

Diageo's financial advisors are UBS Warburg and Greenhill & Co., with Sullivan
and Cromwell acting as US legal counsel and Slaughter and May as English legal
counsel.

UBS Warburg, a business group of UBS AG, which is regulated in the United
Kingdom by the Securities and Futures Authority Limited, is acting for Diageo
plc and no-one else in connection with the combination of Pillsbury and
General Mills and will not be responsible to anyone other than Diageo plc for
providing the protections afforded to customers of UBS Warburg or for giving
advice in relation to the combination.

Greenhill and Co., which is regulated in the United Kingdom by the Securities
and Futures Authority Limited, is acting for Diageo plc and one-one else in
connection with the combination of Pillsbury and General mills and will not be
responsible to anyone other than Diageo plc for providing the protections
afforded to customers of Greenhill & Co. or for giving advice in relation to
the combination.

Forward-looking and Cautionary Statements

This press release contains forward-looking statements based on management's
current expectations and assumptions. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ. The company
undertakes no obligation to publicly revise any forward-looking statements to
reflect future events or circumstances.