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AMERICAN ITALIAN PASTA COMPANY NEWS
RELEASE
Contact:
Linda Ward, Vice President - Investor
Relations and Corporate Communications
816/584-5211
or
Tom Mentzer or Casey Kershner [GRAPHIC OMITTED]
Barkley Evergreen & Partners
816/842-1500
FOR IMMEDIATE RELEASE
AMERICAN ITALIAN PASTA COMPANY
TO ACQUIRE MUELLER'S
Purchase of leading brand expands AIPC's position in category
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KANSAS CITY, MO, October 4, 2000, American Italian Pasta Company
(NYSE:PLB) solidified its position in the pasta category today by signing a
definitive agreement to acquire for cash and stock America's leading pasta
brand, Mueller's, from Bestfoods, which is currently merging with Unilever. The
transaction is expected to close following receipt of normal regulatory reviews.
"The addition of the Mueller's brand to the AIPC family of pasta products
will help us build sales volumes, reduce costs and strengthen our customer
offering, " said Horst W. Schroeder, Chairman of the Board at AIPC. "This move
will also improve our cash flow position and increase the company's long term
profits. The acquisition should not be dilutive to earnings per share in 2001
and should be substantially accretive to earnings per share in 2002."
Schroeder said, "Mueller's is a great fit for AIPC because pasta is our
only business. We have manufactured Mueller's since 1998, so in many respects
this is a natural evolution for us. We are now in a strong position to not only
manufacture Mueller's pasta, but we can also now market and support the brand
and work to improve its market share."
According to Timothy S. Webster, President and Chief Executive Officer of
AIPC, the AIPC manufacturing contract with Bestfoods had become restrictive. "A
more flexible allocation of production volumes between AIPC's facilities will
allow optimization of manufacturing and logistics costs and further enhance our
position as the low cost producer. These cost savings will allow us to increase
trade and consumer promotion support for the brand. The manufacturing contract
also precluded AIPC from production for other branded pasta companies. This move
frees us from those restraints and enables our aggressive pursuit of those
incremental volume opportunities."
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AIPC
Page 2
October 4, 2000
In addition to working to improve Mueller's market share, Webster said the
acquisition expands AIPC's position in the pasta category. "We are in a position
to accelerate our gains in both the branded and private label markets. This will
be particularly evident in Mueller's core markets, where we plan to increase
promotional efforts. We will work to build the brand and increase consumer
interest in this important category. Our acquisition of Mueller's along with our
extensive private label relationships gives us the category breadth we need to
meet the pasta needs for a wide variety of consumers."
Webster said he looks forward to the benefits that this move will allow
AIPC to provide to its retail partners. "This acquisition will strengthen our
existing customer relationships and create opportunities to open new ones. We
will expand our customer-specific offering, improve our cost structure, provide
better logistics and customer service and increase both consumer and trade
promotional activity. It puts AIPC in a much more flexible position to pursue
expanded business opportunities in the future.
"AIPC's ownership of the Mueller's pasta brand along with our focused
approach will bring needed excitement back to the pasta category," said Webster.
"Pasta is our only business and we intend to help our retail customers by
continuing to bring the pasta consumer higher quality products and a wider
variety of options for their at-home dining experience."
AIPC is based in Kansas City, MO, with plants strategically located in
Excelsior Springs, MO, Columbia, SC, and Kenosha, WI and its first international
facility near Milan, Italy. Founded in 1988, the company is the largest and the
fastest growing producer and marketer of dry pasta in North America. AIPC has
rapidly established a significant market presence in North America by developing
strategic customer relationships with food industry leaders that have
substantial pasta requirements. The company's approximately 550 employees
produce more than 80 dry pasta shapes in three vertically integrated U.S.
milling, production and distribution facilities and one Italian production
facility.
The statements contained in this release regarding the acquisition of
Mueller's are forward looking and based on current expectations. Actual future
results could differ materially from those anticipated by such forward-looking
statements. The differences could be caused by a number of factors, including,
but not limited to, those factors identified in a Current Report on Form 8-K
dated October 29, 1997, and amended on Form 8-K/A dated November 2, 1999, filed
by the Company with the Securities and Exchange Commission (Commission file No.
001-13403), any amendments thereto and other matters disclosed in the Company's
other public filings. The Company will not update any forward-looking statements
in this press release to reflect future events. For more information, please
refer to Form 10-Q filed by the Company with the Securities and Exchange
Commission (Commission file No. 001-13403) dated July 26, 2000.
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