General Mills (NYSE: GIS) said today that the company is pleased with the agreement announced by International Multifoods Corporation (NYSE: IMC) to purchase the Pillsbury dessert and specialty products businesses. General Mills anticipates that the agreement will allow the Federal Trade Commission to complete its review of the desserts divestiture and the company’s plans to acquire the remaining worldwide Pillsbury operations of Diageo plc (LSE: DGE; NYSE: DEO). Divestiture of Pillsbury’s desserts and specialty products businesses was assumed in General Mills’ acquisition plan.

International Multifoods has agreed to pay approximately $305 million to acquire the U.S. Pillsbury and Martha White retail dessert and baking products businesses, the Hungry Jack branded potato mix and shelf-stable breakfast product lines, and certain Pillsbury-branded foodservice dessert and baking mix products. In addition, International Multifoods, which owns the Robin Hood baking products business in Canada, will acquire General Mills’ Robin Hood flour business in the United States.

General Mills Chairman and Chief Executive Officer Steve Sanger said, “This strong portfolio of brands, coupled with Gary Costley’s and Jim White’s consumer foods marketing expertise, will make International Multifoods a leading player in the $2 billion U.S. baking products category. The sale of these businesses is intended to enable us to gain regulatory approval for our merger with Pillsbury, and we’re looking forward to completing that transaction.”

Most current analyst estimates for General Mills’ earnings in the fiscal third quarter, which ends Feb. 25, 2001, assume estimated impacts from the Pillsbury acquisition. In last year’s third quarter, General Mills earned 50 cents per diluted share. The consensus of third-quarter estimates published by First Call currently is 36 cents per share. Since the Pillsbury acquisition has not yet closed, General Mills expects its third quarter diluted EPS will be significantly above that consensus estimate.

The company’s current businesses remain on track to achieve another year of double-digit growth for fiscal 2001 in total. Through the first half of the year, General Mills’ diluted EPS grew 10 percent, excluding proceeds from a class-action settlement related to vitamin pricing. In the third quarter, EPS growth for General Mills’ current businesses is expected to be somewhat slower than the first-half rate, consistent with increased levels of new product activity. Fourth-quarter EPS growth for General Mills’ current businesses is expected to be the strongest quarterly increase in the year.

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 expectations about the Pillsbury acquisition could be affected by the timing and process required to complete regulatory review. In addition, our future results could be affected by a variety of factors such as: actions of competitors, including pricing, promotional spending levels and product development; acquisitions or disposals of business 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 currency rate fluctuations. The company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances.

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