Acquisition of Shares in F&N United Limited

Pursuant to Clause 904(1)(d) of the Listing Manual, the Company wishes to announce that its wholly-owned subsidiary, F&N Dairy Investments Pte Ltd ("F&NDI"), has on 16 August 2001 entered into a conditional Sale of Shares and Supplemental Agreement (the "Agreement") with (1) United Foods Public Company Limited ("UFC"), a company organised and existing in Thailand, and (2) Mr Narong Suthimsamphat, the chairman and substantial shareholder of UFC, to increase its shareholding in F&N United Limited, a joint venture company in Thailand, between UFC and F&NDI, ("F&N United").

Under the terms of the Agreement, F&NDI will purchase from UFC 19,600,000 shares of par value Baht 10 each (the "Sale Shares"), representing 35% of the registered share capital of F&N United. F&N United is in the business of manufacturing dairy and ice-cream products in Thailand.

Completion of the sale and purchase of the Sale Shares is scheduled to take place on or about 30 September 2001 and upon completion, F&NDI will own 95% of the total registered share capital of F&N United. The consideration of Baht 168,000,000 (approximately S$6.6 million based on an exchange rate of Baht 25.5 to S$1 taking into account the net tangible asset of the Company at Baht 511,000,000) was arrived at on a willing buyer and willing seller basis.

UFC has also granted an option over its remaining 2,800,000 shares representing 5% of the total registered share capital of F&N United in favour of F&NDI. The option is for a period of 7 years and may be exercised by F&NDI at any time during the option period. The exercise price of the option will be based on the latest audited net tangible assets of F&N United at that time.

The proposed transaction is not expected to have any material effect on earnings or net tangible assets per share of the Fraser & Neave Group in the current financial year.

No director or substantial shareholder of the Company has any direct or indirect interest in the transaction.

I A MacLean
Director and Company Secretary

Submitted by I A MacLean, Director and Company Secretry on 16/8/2001 to the SGX