H. J. Heinz Company (NYSE: HNZ) yesterday announced that it has entered into discussions to acquire the CSM Food Division of CSM Nederland NV of Diemen, near Amsterdam. Discussions are at a stage where it is expected that an agreement can be reached with completion of the transaction early in 2001.

CSM Food Division, a major food company in the Benelux (Belgium, the Netherlands, Luxembourg) region, holds the number-one or number-two brands in each of its markets. CSM’s products include the US$100 million Honig brand of soups, sauces and pastas; Hak brand vegetables packed in glass; and KDR (Koninklijke De Ruijter) brand sports drinks and fortified juices. Additionally, the company markets KDR spreads and sprinkles, which are very popular as traditional toppings for breakfast breads and toasts.

CSM products are sold not only in retail supermarkets and shops but also to foodservice customers for away-from-home eating establishments. The acquisition will double Heinz’s foodservice sales in the Benelux region.

“CSM brand dry, chilled and concentrated soups, sauces and pastas will perfectly complement our international canned soup and pasta brands. The CSM range will become part of our Meal and Snack Solutions business, which worldwide has grown at a 5 percent compound annual growth rate in the two years since Fiscal 1998 and is expected to accelerate to double-digit rates this year. This investment will make us the second-largest food company in Benelux, where the Honig, Hak and KDR brands are consumer favorites. It will extend our product mix into the dry soup segment and, at the same time, will strengthen our sales in Northern Europe,” noted Heinz Chairman, President and CEO William R. Johnson. “KDR sports drinks also will allow us to enter this fast-growing beverage market.”

Heinz currently operates its primary European condiments factory in Elst, the Netherlands and has been a leading food manufacturer in that country since 1958 when it acquired a local food processor.

Further details and terms of the discussions have not been released. The agreement will be subject to appropriate E.U. regulatory clearance.

This news release contains forward-looking statements regarding the company’s future performance. These forward-looking statements are based on management’s views and assumptions, and involve risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These include, but are not limited to, sales, earnings and volume growth, competitive conditions, production costs, industry conditions, achieving cost savings programs, success of acquisitions, including integration of acquisitions, and new product and packaging innovations, and other factors described in “Cautionary Statement Relevant to Forward-Looking Information” in the company’s Form 10-K for the fiscal year ended May 3, 2000, as updated from time to time by the company in its subsequent filings with the Securities and Exchange Commission.

ABOUT HEINZ: With sales over US$9 billion, H. J. Heinz Company is one of the world’s leading marketers of branded foods to consumers everywhere, whether in supermarkets, restaurants or on the go. Its 50 companies operate in some 200 countries, with more than 20 power brands, including the Heinz brand with nearly $3 billion in annual sales. Among the company’s famous brands are Heinz, StarKist, Ore-Ida, 9-Lives, Wattie’s, Plasmon, Farley’s, Smart Ones, The Budget Gourmet, Bagel Bites, John West, Petit Navire, Kibbles ‘n Bits, Pounce, Pup-Peroni, Orlando, ABC, Olivine, Juran and Pudliszki. Heinz also uses the famous brands Weight Watchers, Boston Market and Linda McCartney under license. Information on Heinz is available at http://www.heinz.com.