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Unilever PLC (ULVR)

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Tuesday 06 June, 2000

Unilever PLC

Merger Agreement Signed

Unilever PLC
Unilever NV
6 June 2000

 
UNILEVER AND BESTFOODS SIGN DEFINITIVE MERGER AGREEMENT
FOR ACQUISITION OF BESTFOODS AT $73 PER SHARE 
 
Creates Pre-eminent Global Food and Consumer Goods Company

Transaction Valued At $24.3 Billion 
 
London, Rotterdam and Englewood Cliffs, NJ, June 6, 2000 - Today announced
that they have signed a definitive merger agreement. Under the terms of the
agreement, Unilever will acquire all the outstanding shares of Bestfoods for
$73 per share in cash. Based on the number of shares of Bestfoods on a fully
diluted basis the transaction has a total equity value of approximately $20.3
billion.
 
Unilever will also assume approximately $4.0 billion of Bestfoods's debt.
Unilever expects the transaction to be accretive to Unilever's cash earnings
per share in the first full year of operation. The transaction will be
accounted for using the purchase method and is expected to be completed in
the fourth quarter of 2000.
 
The transaction is conditional upon, among other things, the approvals of
Unilever and Bestfoods shareholders and regulatory approvals, including
European Union and United States anti-trust clearance. The transaction is not
conditional upon financing.
 
The combined company would have had 1999 revenues and operating income of
approximately $52.3 billion and $6.2 billion, respectively. The merged
company will have leading brand positions in key product categories, such as
culinary products, spreads, tea, ice cream and frozen food.
 
Unilever chairman Niall FitzGerald said, 'We are very excited about the
combination of Unilever and Bestfoods. This transaction creates the
pre-eminent global food and consumer goods company. Together we will have a
portfolio of powerful worldwide and regional brands, with strong growth
prospects.
 
'This transaction will accelerate Unilever towards the achievement of our
Path-to-Growth objectives- it makes a good plan better. The complementary
nature of our geographic coverage and our combined product portfolio together
with Bestfoods' strong foodservice operations, will enable us to further
raise our growth ambition.
 
Mr FitzGerald continued: 'In addition to creating a premier portfolio of
foods brands, the combination will bring together two of the world's top
management teams creating one which is capable of realising the growth and
synergy opportunity and leading the category agenda. The Bestfoods management
will play an important role in the company. Their insight and experience will
be of great value as we move forward together in the global marketplace.'
 
C. R. Shoemate, Chairman, President, and Chief Executive Officer of
Bestfoods, said, 'We believe that this agreement achieves outstanding value
for both sets of shareholders. Bestfoods' management and employees look
forward to contributing our knowledge of our brands, businesses, and
geographic markets to a smooth integration process and the creation of the
pre-eminent global food and consumer goods company.'
 
The complementary nature of Unilever's and Bestfoods' portfolios and
geographies uniquely positions the combined company for the acceleration of
top line growth through:
 
- The creation of a robust combined business in the USA 
- Maximising the complementary strength of Unilever and Bestfoods in
  Europe 
- Building on the strength of Bestfoods in Latin America to accelerate the
  growth of Unilever's foods portfolio 
- Using Unilever's strength in Asia Pacific to extend the Bestfoods
  franchise  
- Leveraging Unilever's large range of spreads, tea and tea based
  beverages and culinary products through Bestfoods excellent foodservice
  channel 

The combination through its complementary and enhanced technology base will
be able to support growth by driving innovation within existing Culinary
categories. It will also provide the foundation for expansion into related
Culinary areas.
 
The companies anticipate that the combination will result in cost savings of
approximately $750 million annually from, among other things, the elimination
of duplicate functions, combined purchasing savings, greater efficiencies in
operations and business processes, synergy in distribution and marketing,
streamlining of general and administrative functions, and increased economies
of scale.
 
Unilever has arranged standby credit facilities with ABN-AMRO N.V., Deutsche
Bank A.G. London, Goldman Sachs International and UBS Warburg to finance the
transaction. It is anticipated that the transaction will ultimately be
financed with debt securities having a currency profile that takes into
account the geographic composition of the underlying business.  
 
Bestfoods, formerly CPC International Inc., is the United States' most
international food company, with sales of $8.6 billion in 1999. Best known
among Bestfoods' U.S. products are: Hellmann's and Best Foods mayonnaise and
dressings; Mazola corn oil and margarine; Skippy peanut butter; Knorr soups,
sauces, and bouillons; Entenmann's sweet baked products; Thomas' English
muffins; Arnold, Brownberry, Freihofer's, and Oroweat breads; Boboli pizza
crusts; Mueller's pasta; and Karo syrup. Bestfoods' global Knorr brand
comprises one of the world's most extensive lines of products. Bestfoods is
the most international food company based in the U.S., with operations in
more than 60 countries and products marketed in 110 countries. For more
information about Bestfoods, visit the company's website on the Internet at
http://www.Bestfoods.com.
 
Unilever is one of the world's largest consumer products companies with sales
in excess of $45 billion. It produces and markets a wide range of foods, home
and personal care products. Unilever operates in 88 countries around the globe
and employs  255,000 people. Unilever's well known brands include: Lipton, Ben &
Jerry's and Magnum ice cream, Slim Fast, Dove, Organics and Timotei, OMO,
CloseUp, Mentadent, Rexona, Elizabeth Arden and Calvin Klein. For more
information about Unilever, visit the company's website on the internet at
http://www.Unilever.com.
 
Goldman, Sachs & Co. acted as financial advisor to Unilever and additional
advice was provided by Warburg Dillon Read LLC. Merrill Lynch & Co. and
Salomon Smith Barney Inc. acted as financial advisors to Bestfoods.
 

                                                             
                    Contacts for Bestfoods:                  
                    Media:                                   
                    Gale L. Griffin                          
                    Vice President, Corporate Communications 
                    + 1 201-894-2407                         
 

                                                                              
  Contacts for                                                                
  Unilever:                                                                   
  Tom Gordijn                John Gould              Mike Haines              
  Press Officer, Unilever    Director, Corporate     Press Officer, Unilever  
  Rotterdam                  Affairs, Unilever US    London                   
  +31-10-2174-844            + 1 212-906-4694        + 44-20-7822-6805        
                


                        

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