Kellogg Acquires Specialty Cereals Pty Ltd, a Leading Natural Cereal Manufacturer in Australia

The acquisition of Specialty Cereals provides Kellogg Australia with an entry into the fast-growing Natural Foods segment.

19/09/08 Kellogg Company, the world's leading producer of cereal and a leading producer of biscuits and convenience foods, announced that it has acquired Specialty Cereals Pty Limited, a privately-owned manufacturer of natural ready-to-eat cereals based in Frenchs Forest, Sydney, Australia. Founded in 1988, Specialty Cereals markets products under the Vogels, Wild Oats, and Cerevite brands.

Terms of the transaction were not disclosed. With Specialty Cereals' net sales of approximately $17 million for the 2007/2008 Australian Financial Year, the transaction is not expected to have a material impact on Kellogg Company's 2008 operating profit.

"Consistent with our strategy, we continue to pursue the right kind of opportunities to grow our business," said David Mackay, President and Chief Executive Officer, Kellogg Company. "The acquisition of Specialty Cereals provides Kellogg Australia with an entry into the fast-growing Natural Foods segment."

"The acquisition cements a 20-year relationship between our companies, as Specialty Cereals was already a co-manufacturer and co-packer for Kellogg," added David Denholm, President Kellogg Asia Pacific. "Their brands are a great fit with the Kellogg Australia portfolio and we're thrilled to welcome their employees to the Kellogg family."

The acquisition adds a small manufacturing facility to the Kellogg Company's Australian manufacturing network, with 51 employees. The business will continue to be headquartered in Frenchs Forest, Sydney, and will report into Kellogg Company's Asia Pacific business unit.

Kellogg will leverage its brand-building and innovation expertise, its understanding of the cereal category, and Specialty Cereals' leadership in the Australian natural foods segment to drive continued strong growth of this business.

With 2007 sales of nearly $12 billion, Kellogg Company is the world's leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles and meat alternatives. The company's brands include Kellogg's, Keebler, Pop-Tarts, Eggo, Cheez-It, Club, Nutri-Grain, Rice Krispies, Special K, All-Bran, Mini-Wheats, Morningstar Farms, Famous Amos, Ready Crust and Kashi. Kellogg products are manufactured in 19 countries and marketed in more than 180 countries around the world.