Strategic Alignment,etc

Diageo PLC
17 July 2000

Diageo Maximises Value through Strategic Re-Alignment and Proposed Combination
of Pillsbury and General Mills
==============================================================================

Diageo today announces:
*  Integration of its spirits, wine and beer businesses
*  Proposed combination of The Pillsbury Company ('Pillsbury') and General
   Mills in a transaction which initially values Pillsbury at US$10.5 billion
*  Diageo to retain a shareholding of approximately 33% in the enlarged
   General Mills

Commenting, John McGrath, Diageo Chief Executive Officer, said:

'The consumers who are driving growth in today's market increasingly demand a
range of beverage alcohol for their different drinking occasions.  Our
integrated spirits, wines and beers platform will provide these consumers with
a spectrum of products for today's drinking occasions, and produce revenue
benefits and cost savings for Diageo.

'The combination of Pillsbury and General Mills creates a major new force in
the changing US food industry.  Our shareholding allows us to participate in
the enhanced growth, cost synergies and shareholder value benefits which
accrue to the new General Mills.'

The World's Largest Spirits, Wine and Beer Company
==================================================

The integration of Diageo's UDV and Guinness operations creates a business
with 12 of the world's leading beverage alcohol brands, sales of £7.2 billion
and operating profits of £1.2 billion in 1999.  Its portfolio of world-famous
brands includes global priority brands Johnnie Walker, Guinness, Baileys,
Smirnoff, J&B, Cuervo, Tanqueray and Malibu. In total, these brands account
for around 85% of Diageo's operating economic profit from beverage alcohol.
Accelerated growth from these brands will be the key driver of success for the
new organisation.  Local priority brands - including wine - will also play a
vital role in the portfolio.

The new organisation will bring UDV and Guinness together with an integrated
strategy in beverage alcohol. Its goal will be to achieve a winning share of
high value adult drinking occasions, within a global market for beverage
alcohol which Diageo estimates to be worth some £5 billion in operating
economic profit.  With a combined share of that operating economic profit of
less than 10%, Guinness and UDV have significant scope to increase share.

The integrated company will focus on four major strategic markets - the US,
UK, Spain and Ireland - which deliver 60% of Diageo's operating economic
profit from beverage alcohol. A second group of key markets will comprise 15
to 20 countries - all individually important and with the potential to become
major markets. Other geographic markets will be served by a new venture
grouping, building on the highly successful venture models used in the
business today.

It is currently estimated that the integration will give rise to annual cost
savings of some £130 million, of which some £100 million will be achieved by
the end of the third year.  The exceptional integration charge is expected to
be £170 million, of which £145 million will be cash.

Proposed Combination of Pillsbury and General Mills
===================================================

The proposed combination will create the world's fifth largest food company,
with combined annual turnover of some US$13 billion. The combination will
allow Diageo to capitalise on the changing environment in the US food industry
to the benefit of its shareholders and Pillsbury's brands and employees.

The combination initially values Pillsbury at US$10.5 billion.  Values
throughout this announcement are based on the US$38 average closing General
Mills share price on the New York Stock Exchange over the past month.  The
General Mills closing share price on the New York Stock Exchange on 14 July
2000 was US$36.3125 per share.

The transaction value comprises:

*  141 million newly issued shares of General Mills common stock comprising
   approximately 33% of General Mills' enlarged issued share capital,
   representing US$5.4 billion.

*  US$5.1 billion of Pillsbury debt.

Diageo will be required to put US$642 million into escrow immediately
following completion of the transaction.  Under the escrow arrangements,
interest on the escrow amount will accrue to General Mills.  Diageo may be
required to repay to General Mills on the first anniversary of completion some
or all of such amount to the extent that the General Mills share price exceeds
US$38 over the 20 trading day period prior to that anniversary, with the
maximum payment of US$642 million being made if the average share price over
that period is at or above US$42.55.

Diageo's shareholding in the enlarged General Mills will allow Diageo to
benefit from the accelerated growth and substantial cost savings which the
combination is expected to produce.  General Mills estimates these annual cost
savings to be approximately US$220 million in the year to end May 2002,
increasing to approximately US$400 million by 2003.

On a pro forma basis, the combination is expected to enhance Diageo's earnings
per share in the year ending 30 June 2001. This calculation assumes that the
combination had been completed on 1 July 2000 and is before goodwill
amortisation and exceptional items. Diageo financials are reported under UK
GAAP. General Mills financials are reported under US GAAP.

The combination will result in a reduction in Diageo's net debt.  Diageo will
have interest cover levels above its long term targets and will therefore
review its capital structure, taking into account available investment
opportunities, as part of its commitment to maximising shareholder value.

Diageo has no current plans to divest its shareholding in General Mills. In
the longer term, a reduction in this holding would be consistent with Diageo's
focus on beverage alcohol. Any disposals would only take place having regard
to Diageo's managing for value principles.

Appendix 1 contains pro forma financial information concerning the impact on
Diageo of the combination of Pillsbury and General Mills using historic
financials. The transaction gives rise to a pro forma exceptional gain of over
£400 million, before transaction costs and tax and after charging goodwill
previously written off of £1.4 billion, based on current US dollar exchange
rates. This calculation assumes a General Mills share price at completion of
US$38 and a full repayment of the US$642 million escrow amount to General
Mills, which will occur if General Mills' average share price over the
relevant period prior to the first anniversary of completion is at or above
US$42.55.

Details of the Agreements Between Diageo and General Mills
==========================================================

In connection with the combination, Diageo and General Mills have entered into
agreements under which:

*  Diageo will be entitled to designate two nominees to the slate of directors
   that General Mills nominates for election to its board, bringing the board
   size to 13, for so long as Diageo holds more than 50% of the General Mills
   common stock it receives in relation to the combination.  The initial
   Diageo designees are expected to be Paul S. Walsh and Jack Keenan.  So long
   as Diageo holds 5% or more of the outstanding General Mills shares but less
   than 50% of the shares it receives in relation to the combination, Diageo
   will be entitled to designate one director nominee to the General Mills
   board.

*  Diageo has agreed to vote all of its General Mills shares, until such
   ownership falls below 10% of the outstanding share capital, on all matters
   in the same proportion as the other General Mills shareholders vote on such
   matters, except that Diageo will vote all of its shares in favour of the
   board nominee slate that includes its designees.  Where Diageo's
   shareholding in General Mills is less than 10% of the outstanding share
   capital, Diageo can vote its shares at its discretion on amendments to
   General Mills' articles of incorporation and on business combination
   transactions.

*  Diageo has committed to sell 75% of its shareholding in General Mills
   within ten years of completion.  Diageo can transfer its shares through a
   public offering or through a private placement of shares save for the
   period between eight and 14 months after completion and save that it cannot
   sell to any buyer who would own more than 5% of General Mills' share
   capital (10% in the case of certain institutional buyers).

*  Reciprocal break-up fees of US$105 million are payable by each party in the
   event that the relevant shareholder approval for the combination is not
   obtained.  These break-up fees increase to US$315 million for each party in
   the event that the relevant board does not recommend the transaction and
   the agreements are terminated, or if shareholder approval is not obtained
   after a third party offer for General Mills, Diageo or Pillsbury surfaces.

Other
=====

It is expected that Diageo will publish a circular to shareholders seeking
approval for the combination in September 2000.  The combination is expected
to complete late in 2000, but is subject to regulatory review and the approval
of both Diageo and General Mills shareholders.

A copy of the announcement to be issued by General Mills today is included as
Appendix 2.

Diageo is being advised by UBS Warburg and Greenhill & Co., with Sullivan &
Cromwell acting as US legal advisers and Slaughter and May as English legal
advisers.

A presentation by Diageo for analysts and investors will be held at 09.30 BST
(04.30 EDT) today in London at The Lincoln Centre, 18 Lincoln's Inn Fields,
WC2A 3ED.

For those unable to attend the conference a listen-only dial in service is
available:
Number: [phone]
Title: Diageo

A recording of the conference will also be available for seven days on:
Replay number: [phone]
Client ID: 501
Passcode: 321

Diageo will also hold a press conference at The Lincoln Centre at 11.30 BST
today.

General Mills will hold a presentation for analysts and investors at 14.45 BST
today (09.45 EDT) in New York at the Waldorf Astoria, Starlight Roof.

These presentations will be broadcast by RAW and there will be a
teleconference link ([phone]).  The presentations will also be
available on www.diageo.com.

Diageo enquiries
================

Catherine James
[phone]

Kathryn Partridge
[phone]

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 & Co., 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 Greenhill & Co. or for giving advice in relation to
the combination.

In order to utilise the 'Safe Harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995, Diageo is providing the following
cautionary statement.  This document contains certain forward-looking
statements with respect to the financial condition, operations and business of
Diageo and General Mills and certain of the plans and objectives of Diageo and
General Mills with respect to these items.  These statements are sometimes,
but not always, identified by the words 'may', 'anticipates', 'believes',
'expects' or 'estimates'.  In particular, among other statements, certain
statements are made with regard to synergies, cost savings, exceptional
charges, interest cover, earnings per share enhancement, management
objectives, growth, trends in market shares, trends in results of operations,
margins, overall market trends, and potential repayments of amounts put into
escrow.  By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances that
will occur in the future.  There are a number of factors that could cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements.  These factors include, but are
not limited to, any conditions imposed in connection with regulatory
approvals, stockholder approval, levels of consumer spending in major
economies, changes in consumer tastes and preferences, the levels of marketing
and employee costs, competitive dynamics in the food and beverage markets,
including in the U.S. ready-to-eat breakfast cereal market, pricing and
promotional spending by competitors, changes in consumer perception of health-
related issues, future exchange, inflation and interest rates, changes in tax
rates, changes in laws and regulation, future business combinations or
dispositions, the impact of any change-of-control provisions in contracts with
third parties, unanticipated liabilities, the General Mills stock price one
year after the closing of the transaction, the ability of management of
General Mills to integrate its food business with Pillsbury and the ability of
Diageo management to integrate its UDV and Guinness operations successfully.

Appendix 1

Unaudited Pro Forma Statements
============================

The pro forma statements are provided for illustrative purposes only and
because of their nature may not give a true picture of the financial position
of Diageo.  The pro forma net assets statement is based on the unaudited
consolidated balance sheet of Diageo as at 31 December 1999 and adjusted in
accordance with the notes set out below to give effect to the disposal of
Pillsbury and part acquisition of General Mills as if these transactions had
been undertaken at 31 December 1999.  The pro forma profit and loss account is
based on the audited consolidated profit and loss account of Diageo for the
year ended 30 June 1999 and adjusted in accordance with the notes set out
below to give effect to the disposal of Pillsbury and part acquisition of
General Mills as if these transactions had been undertaken at 1 July 1998.
General Mills will be accounted for as an associated undertaking of Diageo on
the basis that Diageo will exercise significant influence over the activities
of General Mills.

Financial information in respect of Diageo and Pillsbury as at 31 December
1999 and for the year ended 30 June 1999 was prepared in accordance with UK
GAAP.  The information has been extracted from the unaudited financial
statements and underlying information for the period ended 31 December 1999
and the audited financial statements and underlying information for the year
ended 30 June 1999.

The financial information in respect of General Mills as at 28 May 2000 and
for the fiscal year ended 30 May 1999 which has been used for the purposes of
the calculations and pro forma adjustments was prepared in accordance with US
GAAP.  No adjustments have been made to convert this to a UK GAAP basis.  The
information has been extracted from the announcement of audited financial
results for the fiscal year ended 28 May 2000 and the audited financial
statements and underlying information for the fiscal year ended 30 May 1999.

No adjustment has been made to reflect the trading results of Diageo and
Pillsbury subsequent to 30 June 1999 or the trading results of General Mills
subsequent to 30 May 1999.

Diageo Pro Forma Net Assets Statement
=====================================

                                                   Acquisition             
                      31 December     Pillsbury   of associate             
                             1999  (see note 1)   (see note 2)    Pro forma
                        £ million     £ million      £ million    £ million
                                                                           
Fixed assets                                                               
Intangible assets           4,975       (2,455)                       2,520
Tangible assets             3,100         (862)                       2,238
Investments                 1,442         (128)          2,488        3,802
                          -------       -------        -------      -------
                            9,517       (3,445)          2,488        8,560
                          -------       -------        -------      -------
                                                                           
Working capital                                                            
Stocks                      2,153         (284)                       1,869
Debtors                     3,732         (491)                       3,241
Creditors and                                                              
provisions                (4,603)           727                     (3,876)
                          -------      --------        -------      -------
                            1,282          (48)              -        1,234
                          -------      --------        -------      -------
                                                                           
Capital employed           10,799       (3,493)          2,488        9,794
Net external                                                               
borrowings                (5,916)         2,778                     (3,138)
                          -------      --------        -------      -------
Net assets                  4,883         (715)          2,488        6,656
Minority interests          (553)             2                       (551)
                          -------      --------        -------      -------
Net assets                                                                 
attributable to                                                            
Diageo's                                                                   
shareholders                4,330         (713)          2,488        6,105
                          =======         =====        =======      =======

Notes and assumptions
====================

1. The Pillsbury assets to be sold are based on its net assets at 31 December
   1999 translated at an exchange rate of US$1.62.  The net assets include
   US$4,500 million of Pillsbury borrowings.  The additional US$642 million
   of Pillsbury borrowings have not been reflected in the above pro forma
   since some or all of this amount will be paid to General Mills one year
   after completion if the share price of General Mills is in excess of US$38
   during the relevant period.

2. The investment in associate is based on the fair value of 33% of General
   Mills (using the General Mills average closing market price on the New
   York Stock Exchange over the past month of US$38 per share and after
   deducting the Pillsbury borrowings of US$4,500), plus 33% of the net asset
   value (excluding external borrowings) at 31 December 1999 of Pillsbury.
   The resulting investment has been translated to sterling using the 31
   December 1999 exchange rate of US$1.62.

Diageo Pro Forma Profit And Loss Account
========================================

                                                    Acquisition          
                                                             of          
                            Year ended  Pillsbury     associate          
                               30 June  (see note    (see notes          
                                  1999         1)          2,3) Pro forma
                             £ million  £ million     £ million £ million
                                                                         
Turnover                        11,795    (3,757)                   8,038
Operating costs                (9,892)      3,279                 (6,613)
                               -------    -------                 -------
Operating profit                 1,903      (478)                   1,425
Share of profits of                                                      
associates                         188       (13)           370       545
                               -------    -------       -------   -------
Trading profit                   2,091      (491)           370     1,970
Interest                         (324)        206          (92)     (210)
                               -------    -------       -------   -------
Profit before goodwill                                                   
amortisation,                                                            
exceptional items and                                                    
tax                              1,767      (285)           278     1,760
Goodwill amortisation                                                    
(see note 3)                       (4)          4           (6)       (6)
                               -------    -------       -------   -------
Profit before                                                            
exceptional items and                                                    
tax                              1,763      (281)           272     1,754
Tax on profit before                                                     
exceptional items                (463)        110         (101)     (454)
                               -------    -------       -------   -------
Profit before                                                            
exceptional items                1,300      (171)           171     1,300
                                                                         
Exceptional items:                                                       
Charged to operating                                                     
profit                           (382)         77             -     (305)
Charged to associates              (8)          -          (50)      (58)
Disposal of fixed assets          (10)          2             -       (8)
Sale of businesses                 104         39             -       143
Tax on exceptional items            23          -             4        27
                                ------    -------      --------   -------
Exceptional items after                                                  
tax                              (273)        118          (46)     (201)
                                ------    -------      --------   -------
Profit after taxation            1,027       (53)           125     1,099
                                ======    =======      ========   =======
Interest cover                    6.5x                               9.4x
                                                                        

Notes and assumptions
=====================

1. The Pillsbury results have been translated using the average exchange
   rate for the year ended 30 June 1999 of US$1.64.  The interest charge
   reflects interest at 7.5% on the US$4,500 million of Pillsbury
   borrowings.  The tax on Pillsbury's profit before exceptional items has
   been estimated using an effective rate of 39%.

2. The associate results have been based on General Mills' results for the
   year ended 30 May 1999 under US GAAP and translated into sterling using
   Diageo's average exchange rate for the year ended 30 June 1999 of US$1.64.
   Pillsbury's results for the year ended 30 June 1999 are under UK GAAP.
   Diageo's shareholding in General Mills has been assumed to be 33%.  The
   detailed computation is set out below.

3. The associate results do not reflect any adjustments to allocate the
   excess of the consideration for Diageo's 33% investment over the
   historical net book value of General Mills.  Actual fair values will be
   based on the results of studies to be carried out in due course, but it is
   expected that an element of the excess will be allocated to brand values.
   Any residual amount of excess over the fair values of assets and
   liabilities will be allocated to goodwill.  Diageo's accounting policy for
   intangible assets is to amortise goodwill over 20 years and to carry
   brands at fair value cost, subject to annual impairment reviews.

4. The pro forma financials do not reflect any of the cost savings expected
   to arise as a result of the combination of Pillsbury and General Mills.

General Mills Pro Forma Profit And Loss Account
===============================================

                              General Mills  Pillsbury                      
                        Year to                                             
                        30.5.99     Year to    Year to   Combined     33% of
                    US$ million     30.5.99    30.6.99  pro forma   Combined
                                  £ million  £ million  £ million  £ million
                                                                            
Turnover                  6,246       3,809      3,757      7,566      2,497
                          =====       =====      =====      =====      =====
                                                                            
Operating profit                                                            
before goodwill                                                             
amortisation              1,040         634        478      1,112        367
Share of profits                                                            
of associates               (8)         (5)         13          8          3
Interest                  (119)        (73)      (206)      (279)       (92)
                         ------       -----      -----     ------      -----
Profit before                                                               
goodwill                                                                    
amortisation                913         556        285        841        278
Goodwill                                                                    
amortisation               (22)        (13)        (4)       (17)        (6)
                         ------       -----      -----     ------      -----
Profit before                                                               
exceptional items                                                           
and tax                     891         543        281        824        272
Exceptional items          (52)        (32)      (118)      (150)       (50)
Taxation                                                                    
 Before                                                                     
 exceptional items        (323)       (197)      (110)      (307)      (101)
 Exceptional items           19          12          -         12          4
                         ------       -----      -----      -----      -----
                            535         326         53        379        125
                         ======       =====      =====      =====      =====


See notes and assumptions above.

Appendix 2

GENERAL MILLS AND DIAGEO TO COMBINE THEIR WORLDWIDE
CONSUMER FOODS OPERATIONS
===================================================

General Mills' Acquisition of Pillsbury Creates $13 Billion Premier Food
Marketer

Diageo To Hold 33 Percent Equity Stake in General Mills

MINNEAPOLIS, MINN. and LONDON, U.K. - July 17, 2000 - General Mills, Inc.
(NYSE: GIS) and Diageo plc (LSE: DGE; NYSE: DEO) today announced that their
boards of directors have unanimously approved a definitive agreement, under
which General Mills will acquire Diageo's worldwide Pillsbury operations in a
transaction valued at $10.5 billion.  Under the terms of the agreement,
General Mills will acquire Pillsbury in a stock-for-stock exchange.
Consideration to Diageo will include 141 million common shares of General
Mills, valued at $38 per share.  This will represent 33 percent of an expected
426 million basic common shares outstanding.  The total value of the
transaction also includes Pillsbury debt of $5.14 billion.  Of the $10.5
billion transaction value, up to $642 million will be repaid to General Mills
at the first anniversary of the closing, depending on the General Mills stock
price at that time.

General Mills will account for the acquisition of the Pillsbury businesses as
a purchase.  The transaction is expected to close in late calendar 2000,
following regulatory review and required approval by Diageo and General Mills
shareholders.  General Mills expects the transaction to be accretive to its
cash earnings per share in fiscal 2002 and neutral to reported earnings per
share in fiscal 2004.

General Mills will have pro forma annual sales of approximately $13 billion,
including proportionate joint-venture revenues, and pro forma operating
profits of approximately $1.9 billion (before cost savings).  General Mills'
expanded business portfolio will be focused on brands that hold leadership
positions across a number of refrigerated, frozen and dry grocery categories,
including Pillsbury refrigerated baked goods, Yoplait yogurt, Hungry Jack
frozen waffles, Totino's frozen pizza snacks, Betty Crocker dessert, dinner
and side dish mixes, and Big G cereals.

General Mills Chairman and Chief Executive Officer Steve Sanger said,  'We are
very excited about the addition of Pillsbury's businesses to our lineup,
because we expect them to accelerate our top-line growth.  Virtually all of
Pillsbury's leadership brands compete in growing market categories, several of
which represent dynamic new growth platforms for General Mills.  We see
excellent opportunities to build these businesses with the same mix of product
and marketing innovation that has been fueling consistent growth by our
current portfolio. In addition, our complementary operations promise strong
manufacturing, distribution and sales synergies that will contribute to growth
on the bottom line.

'We're equally excited about welcoming Pillsbury people around the globe to
the General Mills family,' Sanger continued.  'Our two companies have similar
cultures, due in part to a shared Minnesota heritage that traces back more
than a century.  We know the experiences and insights of Pillsbury people will
be key drivers of our future success.'

Paul Walsh, Chief Operating Officer of Diageo, said, 'This agreement creates
significant long-term value for the shareholders of both Diageo and General
Mills.  This deal combines two powerful and complementary brand portfolios to
create a major force in the U.S. food industry.  It gives the Pillsbury brands
the right platform from which to achieve their full potential.'

General Mills estimates that this combination will result in cost savings of
approximately $25 million in fiscal 2001 and approximately $220 million in
fiscal 2002, increasing to approximately $400 million annually by 2003.  The
anticipated savings reflect streamlining of general and administrative
functions, greater supply chain efficiencies, synergies in selling and
marketing activities, and increased economies of scale.

General Mills' plans call for the divestiture of Pillsbury's North American
dessert mix business, as well as Pillsbury's North American Green Giant canned
vegetable business.  These divestitures are expected to be completed by the
end of fiscal 2002.

Key Competitive Strengths of the New General Mills:
===================================================

General Mills' sales will almost double, to nearly $13 billion, and its
stronger, more balanced portfolio will be geared for faster growth.
Pillsbury's major retail categories have been growing at a significantly
faster rate than General Mills' categories.  In addition, General Mills' new
business mix has a much stronger convenience profile, with nearly 80 percent
of retail sales generated by ready-to-eat or quick-to-prepare foods.

Beyond retail, General Mills will have significantly broader scale and
capabilities in the fast-growing Foodservice channel.  Combined pro forma
Foodservice sales will exceed $1.7 billion, making General Mills one of the
top U.S. Foodservice manufacturers.

Our pro forma sales in fast-growing international markets will double, to $2.3
billion.  In combining these businesses, General Mills will now have
manufacturing, distribution and sales infrastructure in a number of global
markets, including the U.K., Western Europe, Latin America and Australia.

The company will be the market leader in the $1.5 billion U.S. refrigerated
dough category.  This business significantly expands General Mills'
participation in refrigerated foods, where the company already holds
leadership positions in the $2 billion yogurt category, and the $580 million
market for refrigerated entrees.

General Mills will compete in two new breakfast food categories, with Hungry
Jack frozen waffles and Pillsbury frozen pastries complementing the Big G
ready-to-eat cereal line.

The company will market a broader array of convenient lunch and dinner
choices, with Totino's frozen pizza and snacks, Green Giant frozen vegetables
and meal starters, Progresso soups, and Old El Paso Mexican foods joining the
Betty Crocker dinner and side dish mix businesses.

'The addition of Pillsbury fits very well with the key growth strategies we've
defined for General Mills, and enhances our future prospects,' Sanger
concluded. 'Since 1995, our reported sales have grown at a 6 percent compound
rate.  With our new portfolio, we expect our topline growth rate to be at
least a percentage point higher.  And as a result of this combination we are
adding 1 to 2 points to our double-digit EPS growth rate target, bringing it
to a range of 11 to 15 percent.'

The transaction value includes a contingent amount of $642 million, which may
be repaid to General Mills on the one-year anniversary of the closing date.
If the average trading price of General Mills common stock for the 20 days
preceding that anniversary date is $42.55 per share or more, General Mills
will receive the entire contingent payment.  If the average trading price is
$38.00 or below, Diageo will retain the contingent amount.  If the average
price is between these figures, Diageo and General Mills will share the
contingent payment.

The agreement includes a standstill provision, under which Diageo is precluded
from buying additional shares in General Mills for a 20-year period following
the close of the transaction or for three years following the date on which
Diageo owns less than 5 percent of General Mills' outstanding shares,
whichever is earlier.  The agreement also generally requires pass-through
voting by Diageo, so its shares will be voted in the same proportion as the
other General Mills shares are voted.  Diageo has committed to reduce its
shareholding in General Mills over a ten-year time period.  Diageo initially
will designate two directors to join General Mills' board, bringing the board
size to thirteen.  The Diageo designees are expected to be Paul S.Walsh, Chief
Operating Officer, Diageo, and Jack Keenan, Chief Executive Officer of
Diageo's UDV unit.  This representation will be reduced as Diageo's ownership
stake declines.  So long as Diageo retains board representation, it will vote
all of its General Mills shares in favor of the board-nominated slate of
directors that includes its designees.

Projected fiscal 2001 cash flow from operations is estimated at approximately
$1.0 billion.  General Mills intends to maintain its prevailing annual
dividend of $1.10 per share.

Evercore Partners and Merrill Lynch are acting as financial advisors to
General Mills, with Wachtell, Lipton, Rosen & Katz and Collier Shannon Scott
acting as legal counsel.  Diageo's financial advisors are UBS Warburg and
Greenhill & Co., with Sullivan & Cromwell acting as U.S. legal counsel and
Slaughter and May as English legal counsel.

About General Mills
===================

General Mills is a leading manufacturer and marketer of consumer foods
products, with fiscal 2000 worldwide sales of $7.5 billion.  Major U.S.
businesses include: Big G ready-to-eat cereals, Betty Crocker dessert, baking
and dinner mix products, snack products, and Yoplait and Colombo yogurt.  The
company's expanding international operations include company-owned businesses
in Canada, Mexico and China, as well as a snacks joint venture in continental
Europe with PepsiCo and a worldwide cereal joint venture with Nestle.  More
information is available at www.generalmills.com.

About Diageo
============

Diageo is one of the world's leading consumer goods companies.  Formed in
December 1997 through the merger of GrandMet and Guinness, Diageo has an
outstanding portfolio of world famous consumer brands including Smirnoff,
Johnnie Walker, Guinness, J&B, Gordon's, Tanqueray, Pillsbury and Burger King.
Diageo employs some 72,000 people across more than 200 markets worldwide.  For
more information about Diageo, visit their website at www.diageo.com.

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.  In
particular, our predictions about the Pillsbury acquisition could be affected
by regulatory and stockholder approvals; integration problems; failure to
achieve synergies; unanticipated liabilities; inexperience in new business
lines; and changes in the competitive environment.  In addition, our future
results also could be affected by a variety of factors such as: competitive
dynamics in the U.S. ready-to-eat cereal market, including pricing and
promotional spending levels by competitors; the impact of competitive products
and pricing; product development; actions of competitors other than as
described above; acquisitions or dispositions of businesses or assets; changes
in capital structure; changes in laws and regulations, including changes in
accounting standards; customer demand; effectiveness of advertising and
marketing spending or programs; consumer perception of health-related issues;
economic conditions, including changes in inflation rates or interest rates;
fluctuations in the cost and availability of supply-chain resources; and
foreign economic conditions, including currency rate fluctuations.  The
company undertakes no obligation to publicly revise any forward-looking
statements to reflect future events or circumstances.

In connection with this transaction, General Mills will be filing a Proxy
Statement with the Securities and Exchange Commission.  SECURITY HOLDERS OF
GENERAL MILLS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE,
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION REGARDING THIS BUSINESS
COMBINATION.  Investors and security holders may obtain a free copy of the
statement when it becomes available at the Securities and Exchange
Commission's website at www.sec.gov.

Contacts:
=========

General Mills, Inc.               Diageo plc
Investors:                        Investors:
Kris Wenker                       Catherine James
VP, Investor Relations            Group Investor Relations Director
763-764-2607                      011 44 20 7927 5272
                                  
Media:                            Media:
Austin Sullivan                   Kathryn Partridge
SVP, Corporate Relations          Group Head of Corporate
763-764-7264                      Communications
                                  011 44 20 7927 5225
Josh Silverman / Joele Frank      
Joele Frank, Wilkinson Brimmer    
Katcher
212-355-4449

Note to Editors
You are cordially invited to participate in the General Mills press conference
on Monday, July 17, 2000 at 12:15 pm (EDT) at the Waldorf-Astoria Hotel in New
York City, located on 301 Park Avenue (between 49th & 50th streets), at the
Starlight Roof (18th floor). If you are unable to attend, you can participate
by dialing [phone] (within the United States) or [phone]
(internationally).

Live Satellite Uplink for General Mills Press Conference:
Monday, July 17, 2000
12:15 - 1:15 PM (EDT)
Telestar 6 (KU); Transponder 25
Uplink frequency: 14444 (H)
Downlink frequency: 12144 (V)

If you have any technical questions or problems with live satellite feed, call
Jeff LaMarita or Al Marino at 917-273-3057 or 917-414-7118.

Satellite Uplink for General Mills B-Roll:
Monday, July 17, 2000        Monday, July 17, 2000
7:00-7:30 AM (EDT)           11:00-11:30 AM (EDT)
Telstar 6; Transponder 9     Telstar 5; Transponder 16
Downlink frequency: 3880     Downlink frequency: 4020

If you have questions or problems with the B-Roll satellite feeds, call Bret
Curran at 212-627-5622.