Kraft Foods to Sell Stella D'oro to Better Focus Its Brand Portfolio
December 21, 2005

NORTHFIELD, IL - December 21, 2005– Kraft Foods Inc. (NYSE: KFT), a global leader in branded food and beverages, announced today that it has agreed to sell its Stella D’oro business to Stella D’oro Holdings, LLC, a newly formed subsidiary of Brynwood Partners.   Kraft estimates that the Stella D’oro business, which includes cookies, breakfast treats, bread sticks and biscotti, will generate approximately $30 million in net revenue in 2005.

“This decision is consistent with Kraft’s strategy to shift our portfolio toward businesses in which we have sustainable competitive advantage,” said Dave Johnson, President, Kraft North America Commercial (KNAC).  “Selling this business enables us to better focus our time and resources on opportunities that provide Kraft with the greatest potential for long-term growth.”

The sale includes Kraft’s manufacturing facility in Bronx, New York. As part of the transaction, approximately 180 Kraft employees, including management staff, hourly production workers and route drivers servicing the metro NY area, will join Stella D’oro Holdings.  “We are grateful to the Stella D’oro employees for their commitment and dedication to the business, and wish them continued success in the future,” said Johnson.   

Henk Hartong III of Brynwood Partners, who will serve as Chairman, Stella D'oro Holdings, LLC, said, "Brynwood Partners has extensive experience in the branded food industry, and we are looking forward to investing in the company and growing the Stella D'oro business in the days ahead."

The transaction is expected to be completed in January 2006.
Kraft Foods markets many of the world’s leading food brands, including Kraft cheese, Maxwell House and Jacobs coffees, Nabisco cookies and crackers, Philadelphia cream cheese, Oscar Mayer meats, Post cereals and Milka chocolates, in more than 155 countries.