Leading Spanish food group Ebro Puleva has entered into a deal with Kraft Foods to acquire Kraft's Minute Rice brand and assets for approximately US$280m.

Minute Rice will be incorporated into Riviana Foods, Ebro Puleva's wholly owned US unit. Riviana Foods is one of the US's largest processors, marketers and distributors of branded and private label rice products.

Established in the 1940s, Minute Rice was the world's first pre-cooked rice and has since achieved iconic status. It is currently sold in four varieties: White Rice, Brown Rice, Boil-in-Bag and Premium Rice. In 2005, net revenues totalled approximately $90m.

"The acquisition of Minute Rice is consistent with our strategic plan to expand our position in the North American rice business through new products and entry into new markets," said Antonio Hernandez Callejas, chairman and CEO of Ebro Puleva. "It is also an excellent fit with Riviana's extensive line of branded rice products."

Kraft said that the sale was part of its strategy to focus its portfolio of brands.

"Our decision to sell Minute Rice is part of a broader effort at Kraft to focus our portfolio," said Dave Johnson, president, Kraft North America Commercial. "While Minute Rice is a great brand, our focus is on businesses in which we believe we have a sustainable competitive advantage."

Kraft said the sale is expected to generate a one-time gain of $0.10 per share and ongoing dilution is expected to be $0.01 per share, neither of which was included in Kraft's July 24, 2006 earnings guidance.

The transaction is subject to regulatory approval.