Acquisition

Premier Foods plc
09 December 2004



9 December 2004





           Premier Foods reaches agreement to acquire Bird's custard
                          and Angel Delight from Kraft



Premier Foods plc ('Premier'), one of the leading suppliers of ambient grocery
products in the UK, today announces that it has reached agreement to acquire the
category leading Bird's Custard, Angel Delight and associated brands from Kraft
Foods Inc. for £70 million. The consideration will be funded from existing
unutilised bank debt facilities.



Bird's Custard, Angel Delight and other associated brands are complementary to
Premier's existing desserts business, which includes Ambrosia custard and milk
puddings and Rowntree's jelly, and will broaden Premier's range of household
names in the ambient grocery sector including Branston, Loyd Grossman, Typhoo,
Crosse & Blackwell, HP, Hartley's, Gale's and Sun-Pat.  In the year ended 14
December 2003 sales for the brands being acquired were £37 million with profit
before central administrative costs of £9.9 million.  Net assets at the time of
completion are expected to be £5 million.



Premier is acquiring the brand rights, associated intellectual property, stock
and packaging machinery.  Production and packing will be integrated into
Premier's existing manufacturing facility at Knighton in Staffordshire during
2005.  Premier expects to incur capital expenditure of approximately £5 million
on upgrading the facility to accommodate the business.



Premier expects the acquisition to generate cost savings and other synergistic
benefits once completed in February 2005 of approximately £1 million. The deal
will be earnings enhancing and is expected to achieve a return on invested
capital that is greater than its weighted average cost of capital in the first
full year of ownership.



This acquisition is Premier's first since its IPO in July 2004 and is consistent
with Premier's stated strategy of acquiring great British brands with leading
market positions that will further exploit the company's marketing skills,
strong retailer relationships and manufacturing base.



Robert Schofield, CEO of Premier Foods plc, said:

'The Bird's business with its high brand recognition is a perfect fit with our
Ambrosia and other desserts brands.  It will extend our product range in the
desserts category and enhance our position as one of the UK's leading suppliers
of ambient grocery products.



'The acquisition is expected to be earnings and margin enhancing in the first
full year of ownership and meets the acquisition criteria we outlined at the
time of our IPO.'



The transaction is subject to the approval of the board of Altria Inc. (Kraft's
parent company) and is expected to complete during February 2005.







For further information, please contact:


Premier Foods plc                              Tel:  [phone]
Robert Schofield, Chief Executive
Paul Thomas, Finance Director


Citigate Dewe Rogerson                         Tel: [phone]
Michael Berkeley, Sara Batchelor, Anthony Kennaway





Notes to Editors



1.  The Bird's dessert business being acquired comprises 17 branded and out of
home ('OOH') products including Bird's custard powder (2 varieties), Bird's
instant custard (5 varieties), Bird's ready to eat (RTE) ambient custard (5
varieties), Bird's RTE chilled custard (2 varieties), Angel Delight (11
varieties), Bird's trifle/Dream Topping (7 varieties), Bird's Christmas sauces
(4 varieties), Bird's semolina and Bird's sugar free jelly (4 varieties).



2.  Bird's is a leading custard brand in the UK accounting for 45% of total
pints of custard consumed in the country and an 85% value share of powder
custards.  Angel Delight is the number one player in the UK instant cold
desserts sector with a 40% share.*



3.  Bird's is one of the UK's oldest packaged grocery brands, with its original
launch in 1837. Landmark campaigns, such as the creation of the 'Three Birds'
trademark in the 1920s have helped build the profile of the brand over time.
Bird's was acquired by General Foods in 1947 and has been part of Kraft since
1989.  The Bird's dessert business contains a number of iconic brands in the UK
food retail industry including Bird's custard and Angel Delight instant cold
dessert. Bird's has been the leading powdered desserts brand since Alfred Bird
invented custard powder in 1837 and according to a food and drink research
survey in 2000, the Birds brand was recognised by 99% of UK customers.



4.  Premier Foods plc is a leading UK manufacturer and marketer of shelf-stable
or 'ambient' grocery products and one of the largest suppliers of grocery
products in the United Kingdom.  Premier manufactures and markets grocery
products for the retail grocery and out of home channels in three principal
product segments:

•        convenience foods, pickles and sauces;
•        tea and beverages; and
•        spreads and desserts.

Premier also operates a potato packing and marketing business in the United
Kingdom, supplying the retail grocery, OOH and food manufacturing channels.



5.      Premier's branded products include Ambrosia custard and milk puddings,
Branston pickles, Typhoo tea, Hartley's  preserves, Gale's honey and lemon curd,
Crosse & Blackwell convenience foods, Sun-Pat peanut butter,  Sarsons vinegar,
Haywards pickles, Smash instant mashed potato, Marvel powdered milk creamer and
Waistline salad dressings, soups and cooking sauces.  In addition, the Company
produces Cadbury cocoa-based beverages, HP convenience foods, Rowntree's jelly
and Loyd Grossman cooking sauces, soups and salad dressings under agreement or
licence. Premier also produces a range of retailer brand products, principally
for the major multiple retailers.



6.      Premier Foods was floated on the London Stock Exchange in July 2004 when
Hicks, Muse, Tate & Furst sold 80% of its investment in Premier.  In October
2004 Hicks, Muse, Tate & Furst sold their remaining 20% holding.  Premier's
current market capitalisation is £605 million (at market close on 8 December
2004).





* AC Nielsen consumer units data 2003


                      This information is provided by RNS
            The company news service from the London Stock Exchange