Packaging

Kellogg Acquires Assets of Zhenghang Food Company, Leading Biscuit Manufacturer in China

Monday 30. June 2008 - Kellogg Company today announced that one of its majority-owned subsidiaries has acquired substantially all of the assets of Zhenghang Food Company Ltd. ("Navigable Foods"), a manufacturer of cookies and crackers in the north and northeastern regions of China.

Terms of the transaction were not disclosed. Navigable Foods’ 2007 net sales were approximately $50 million.

“Geographic expansion in high-growth markets like China will help Kellogg Company continue to deliver sustainable growth,” said David Mackay, president and chief executive officer, Kellogg Company. “Navigable Foods’ biscuit products are a strong, strategic fit within the Kellogg portfolio and will further build our presence in China.”

Founded in 1993, Navigable Foods is one of the major biscuit manufacturers in China, providing consumers with a large variety of cookie and cracker products under the ZhengHang brand.

Navigable Foods’ approximately 1,800 employees, including the company’s management team, will join a majority-owned subsidiary of Kellogg Company. The acquisition includes two manufacturing facilities located in Yishui county, Shandong province, and Fushun city, Liaoning province, as well as the company’s sales and distribution network. Kellogg Company is the first Fortune 500, multinational company to invest in Yishui county, where Navigable Foods’ main plant is located. The business will continue to be headquartered in the city of Qingdao, Shandong province, and will report into Kellogg Company’s Asia Pacific business unit.

Kellogg will leverage its brand-building and innovation expertise, its understanding of the biscuit category, as well as Navigable Foods’ existing manufacturing, sales and distribution infrastructure, to drive continued strong growth of this business.

Recently, Kellogg’s Corporate Citizenship Fund (KCCF), the charitable arm of the company, made a $250,000 donation to the American Red Cross, designated to support the earthquake relief efforts of its sister organization, the Red Cross Society of China (RCSC).