PSE Circular for Brokers No. 299-00

February 9, 2000 PSE CIRCULAR FOR BROKERS NO. 299-00 Pillsbury, Pure Foods Form New Company The Pillsbury Company, a global leader in flour and dough based products, and Pure Foods Corporation, a major consumer foods company in the Philippines, have recently entered into a joint venture which consolidates their formidable strengths and respective leadership positions in the fast-growing food market. LibLex The partnership creates a synergy between two dynamic companies which both have a long history of creating products of distinctive quality, and are focused on providing products that satisfy customer's evolving needs. llcd The partnership was launched on February 8 with the signing of the joint venture agreement by Lucio Rizzi, president of the International division of the Pillsbury Company and Pure Foods president Renato R. Montemayor. It was witnessed by Jaime Zobel de Ayala and Jaime Augusto Zobel de Ayala, Pure Foods Chairman and Vice-Chairman respectively, as well as the senior management teams of both companies. Under the agreement, the Pillsbury Company, through a subsidiary will have a 60% majority ownership, while Pure Foods Corporation shall own the remaining 40%. The joint venture company, called Pillsbury Pure Foods Company, Inc., will bring together Pillsbury's manufacturing technology and global marketing expertise and Pure Foods' strong local market knowledge, flour market leadership and food service capability in product development, sales and distribution. Montemayor points out that Pure Foods' decision to tie-up with a globally recognized brand is in consonance with the company's objective of maintaining leadership in the market and developing "downstream" demands for its commodity-based flour product. "We intend to become a major player in the retail market for premixes," Montemayor said. He explained that this new joint venture is expected to expand activities in the differentiated and branded flour and flour-based products. The new line of flour products, which will be carried under the Pillsbury brand will include flour pre-mixes such as cake, pancake and doughnut mixes, and frozen bakery products. Pillsbury is a subsidiary of Diageo plc., one of the world's leading consumer foods companies which boasts of an outstanding portfolio of world famous food and drinks brand. Pillsbury, one of the world's leading food companies, manages a list of fast-growing international megabrands Pillsbury, Green Giant, Old El Paso, and Haagen-Dazs. cdlex Aside from Pillsbury, Diageo owns and operates other world class businesses which include United Distillers & Vintners, one of the world's leading spirits and wines company; Guinness, one of the world's leading brewers and the marketer of the world's most famous stout; and Burger King, the world's second largest hamburger restaurant chain. Pure Foods, on the other hand, is a member of the Ayala Group of Companies, the oldest and biggest business conglomerate in the country which is built on a reputation for quality and excellence. Pure Foods has diversified from a meat processing company into a variety of food businesses with its expansion to poultry in the 80's, its venture into the flour business in 1992, and its recent acquisition of the Burger King franchise. The move is another landmark alliance for the country's foremost food company which has tied-up with other world-class food companies like US-based Hormel Foods Corporation, Myojo Foods and Mitsui, Burger King and Indonesian companies Hero Group and the Sinar Mas Group. The marriage between Pillsbury and Pure Foods puts together the strength of the two giant companies which share the same business philosophies, organizational values, and a common passion for creating products of the highest quality standards. cdlex