Kellogg Company announced today that it has acquired Kashi (KAH-SHE) Company, a leading natural cereal and convenience foods company.

Terms of the agreement were not disclosed. Kashi Company will continue to be based at its La Jolla, Calif., headquarters and will operate as part of Kellogg’s natural and functional foods division.

Founded in 1984 by Philip and Gayle Tauber, Kashi Company grew by more than 100 percent in the fiscal year just ended and is expected to deliver strong double-digit growth through the remainder of 2000.

“The acquisition of Kashi Company will give Kellogg leadership in a growing segment of the ready-to-eat cereal (RTEC) category,” said Kellogg Company Executive Vice President John Cook, president of Kellogg North America. “Kashi will enhance our leadership position in the RTEC category and further extend our commitment to build our consumer base in the rapidly growing natural foods marketplace.” In November 1999, Kellogg acquired Worthington Foods, Inc., the nation’s leader in the veggie foods category.

Kashi Company products are made with a blend of sesame and seven whole grains — oats, long grain brown rice, rye, hard red winter wheat, triticale, buckwheat, and barley. The products are available in supermarkets and natural food stores in the United States and Canada and may also be ordered by mail and through the Internet ( www.kashi.com). Brands include the original Kashi Pilaf, Kashi To Good Friends, Puffed Kashi, Kashi GoLEAN Cereal Slimming System (soy-based cereal, shakes, and bars), Kashi Medley, Honey Puffed Kashi, Kashi Pillows (filled cereal snacks), Kashi go (portable meals), and Kashi Baby & Me.

“With its nearly 100-year legacy of producing great-tasting, grain-based foods, Kellogg Company is an ideal partner for our young company,” said Philip Tauber, Kashi Company president. “Working with Kellogg, we will continue to pay homage to our roots in the natural foods channel as we pursue a broader, mainstream consumer market for our products.”

With sales of nearly $7 billion, Kellogg Company is the world’s leading producer of ready-to-eat cereal and a leading producer of convenience foods, including toaster pastries, cereal bars, frozen waffles, wholesome snacks, and veggie foods. Kellogg products are manufactured in 20 countries and marketed in more than 160 countries around the world.