Private Equities Take United Biscuits for £1.6 Billion

26/10/06 The Blackstone Group and PAI partners have entered into a definitive agreement to acquire United Biscuits for a purchase price in excess of GB£1.6 billion. The transaction will be financed through a combination of equity contributed equally by Blackstone and PAI funds and debt financing. It is expected that members of United Biscuit's management team will participate in the ownership of the ongoing entity.

The Company is a leading European manufacturer of biscuits and snacks. It is the number one player in the UK biscuit market with well-known household brands such as McVitie's, go ahead! and Jacob's. UB is also the number two business in the biscuit markets in France and Belgium, joint number one in the Netherlands, the number two in the UK bagged snacks market and UK cake market and the number one in the UK nuts market.

Malcolm Ritchie, Chief Executive, UB says, "Blackstone has a successful track record of owning and developing companies such as UB and I believe the Company will benefit from their involvement. PAI is one of our existing shareholders and we are delighted that they continue to see the great potential of the business and want to remain as shareholders. We delivered a strong half year result and we continue to see opportunities to further develop our key brands in all sectors."

David Blitzer, Senior Managing Director of The Blackstone Group, says, "We are attracted to United Biscuits' market position as well as its existing and new product lines. We look forward to partnering with the strong management during this next step of the company's evolution."

The completion of the transaction is subject to satisfaction of customary conditions to closing, including the clearance by the European Commission as well as consent of the UK Pension Regulator, and is expected to close by December 2006. The equity financing necessary for the transaction has been fully committed by Blackstone and PAI and the debt financing necessary for the transaction has been fully committed by Barclays, Goldman Sachs and JP Morgan, subject to customary closing conditions including completion of definitive documentation. Blackstone and PAI were also advised by JP Morgan, Herbert Smith and Simpson Thacher.

Bertrand Meunier, Senior Partner of PAI declares "We have known United Biscuits for a long time and welcome the opportunity to continue working with its outstanding management team which has led an impressive turnaround. We fully support their strategy to continue to develop market positions through new product developments and selected acquisitions".