– Approval of US FTC, as well as of the regulatory authorities of other countries and regions, clears way for Ralston Purina acquisition – deal to be closed by December 31, 2001


ST. LOUIS–(BUSINESS WIRE)– Integration team in place under the leadership of John Harris, Worldwide Integration Executive, reporting to Nestle Group CEO


North American petcare operations poised for smooth transition and continued growth under the management of W. Patrick McGinnis, current CEO of Ralston Purina Peter Brabeck-Letmathe, CEO of Nestle, stated: “The FTC approval opens the way for the creation of a new and dynamic leading petcare company worldwide and in North America, fully dedicated to consumers and their pets. Combining Ralston Purina’s and Nestle’s R&D, technology and marketing know-how ensures even more competitiveness in the world’s most important petcare market, giving Nestle a solid base for long-term shareholder value creation.”


The US Federal Trade Commission announced its approval of the Ralston Purina acquisition, proposed by Nestle on January 16, 2001. Nestle will now acquire Ralston Purina shares at USD 33.50 per share in cash, by the end of this year. The transaction has an enterprise value of USD 10.3 billion (USD 10.0 billion equity plus USD 1.2 billion of net debt, minus USD 0.9 billion of financial investments). This acquisition will be financed by USD denominated debt. As a result of the strength of Nestle’s balance sheet, the Group will retain its AAA rating after the completion of the transaction, the largest in Nestle history.


In the meantime, the acquisition proposal was accepted by Ralston Purina shareholders on May 21, and approved on July 27 by the Competition Authorities of the European Union as well as the other relevant markets around the world.

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Ever since it acquired the Friskies business with Carnation in 1985, Nestle has considered petcare as a strategic growth area. Today, the Nestle Group’s petcare business amounts to about USD 3.7 billion in sales. Ralston Purina sales, with its global Purina brand, totaled USD 2.7 billion in the year 2000, with North American sales accounting for USD 2.25 billion. The combined sales of Nestle and Ralston Purina will amount to USD 6.3 billion, making the Nestle Group a co-leader in the petcare industry.


Nestle expects that combining the two companies will significantly improve operating efficiencies in all areas. Savings should reach USD 260 million and will be fully achieved by the end of 2003 and Nestle is confident on achieving these targets. The full-time global integration executive, Mr. John Harris, who reports directly to the CEO of the Nestle Group, will act as a catalyst for a smooth and rapid transition and integration of the new business. The North American Friskies business will be merged with the existing Ralston Purina organization. The new organization will be called “Nestle Purina PetCare Company” and will be based in St. Louis, Missouri. Mr. W. Patrick McGinnis, current President and CEO, of Ralston Purina, will be CEO and President, with Mr. Joe Weller, Chairman and CEO of Nestle USA, as Chairman. In the rest of the world the petcare business will be integrated into existing operations wherever possible.


The two companies complement each other perfectly in terms of product categories and geographic presence. Friskies, Nestle’s brand in this sector, will rapidly complement its own strength in wet cat food with the unique expertise and strong presence of Ralston Purina in the dry dog food area. Moreover, Nestle expects that Friskies’ good market position in Europe and in other continents will allow it to quickly internationalize Ralston Purina’s science-based product lines and thus to significantly expand its business in the premium sector and in specialized sales channels. Moreover, Ralston Purina’s excellent performance during the first nine months of 2001, in a fiercely competitive environment, confirms Nestle’s belief that this acquisition will contribute significantly to the increase of sales and profits in the Group’s petcare sector.


The North American headquarters for Nestle Purina Pet Care is located at Checkerboard Square in St. Louis, Missouri, where Ralston Purina Company was founded more than a century ago. Nestle Purina PetCare is part of Swiss-based Nestle S.A. – the world’s largest food company. Visit us at http://www.Nestle.com.