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PRESS RELEASE

Ter Beke Processed Meats Division and Pluma merge
to become largest Belgian processed meats group

Waarschoot / Wommelgem, 16 March 2006

On 15 March 2006, the Ter Beke Group from Waarschoot and the processed meats group Pluma from Wommelgem signed an agreement which should lead to the merger of the two companies by the end of May 2006. The Processed Meats Division of Ter Beke (turnover 130 million €) and Pluma (turnover 100 million €) are highly complementary with respect to both customers and products. Together they form the third largest processed meats group in the Benelux and the market leader in Belgium.  The merger is being paid for in part by the issue of 342,254 new shares and in part by the payment of 5.5 million €. In the short term the merger will make a positive contribution to the profit of the group and offers the best prospects for continuing to grow successfully in a consolidating market.

Interest of this transaction

Ter Beke has developed a growth strategy for both of its core businesses: fresh ready meals and processed meats. The two markets have their specific characteristics and their own dynamic.
The development of fresh ready meals focuses on international growth and is increasingly supported by investments in the consumer brand Come a casa. Ter Beke is also continuing to actively look for external growth for this division.

For both Ter Beke and Pluma the processed meat market is located primarily in the Benelux. In addition, both have a strong presence with pâtés on the English market.  Like all Western European countries, the Benelux market is stable and consolidating (Belgium) or consolidated (Netherlands). For the past 10 years, processed meats consumption in the Benelux has remained virtually unchanged. However, the stability of this market conceals a major shift from over-the-counter products to pre-packaged processed meats which is occurring at a rate of more than 10% per year.
That the Belgian processed meat market is only partially consolidated is shown by the fact that the three largest producers together represent a market share of only 30%. In the Netherlands, the top three together already account for 70% of the market.

In these stable processed meats markets, critical mass and scale are of fundamental importance. These are private label markets (90% in Belgium and virtually 100% in the Netherlands) with major retail clients which expect from their supplier-partners a full range with innovative concepts in terms of product and packaging. The wholesaler in the traditional channel and the specialised customer in the food service channel also expect - in addition to a top-quality product - professional service based on high-tech IT and logistical competences.

Within this framework, the merger of the processed meats activities of Ter Beke and Pluma is a strategically important step which brings forth a new market leader.
The Ter Beke - Pluma processed meats group becomes the market leader in Belgium with a 17% market share (source: GFK March 2006) and the number three on the Benelux level.  In the United Kingdom, the merged group is number one in pâtés.
After the merger, the new processed meats group will achieve an annual turnover of around 230 million € and employ around 900 people, distributed over establishments in Wommelgem, Waarschoot, Veurne, Ruiselede, Herstal, Marche-en-Famenne and Milsbeek (Nijmegen, Netherlands).

The listed Ter Beke Group will, including its fresh ready meals division, achieve a total turnover of around 330 million EUR (on the basis of 2005 figures) and employ over 1,600 people.

Ter Beke Processed Meats is strong in salami, processed poultry meats and pâtés. Moreover, Ter Beke has developed a strong position in pre-packaging with the establishments in Veurne and Milsbeek. Pluma is the leader in cooked ham, pâtés and cooked meats, and is also active in salted processed meats. The merged group thus covers a large share of the total assortment.
In 2005, Pluma installed a "state-of-the-art" production line for cooked hams and cooked meats intended for cutting and pre-packaging.
With more than 35 packaging lines, Ter Beke–Pluma is the largest pre-packager of processed meats in the Benelux.

The complementarity in terms of customers, products and production means that there is virtually no overlapping between the two companies. Together Ter Beke and Pluma can generate major synergies, above all in the area of purchasing, logistics, product development and commercial power.  On this basis, the management is confident that the merger will create value in the short term.

Price and technical aspects of the merger

Pluma will be brought 100% into Ter Beke NV in exchange for 342,254 shares to be newly issued.  With the capital increase this package will represent 20% of the new total number of listed shares (1,711,271) of Ter Beke NV.
In addition, Ter Beke will pay the one-time amount of 5.5 million EUR.
The Coopman family (current principal shareholder of Ter Beke) and the main shareholders of Pluma will together form a company which will hold a 55% interest in Ter Beke.  Within this company there will be a ratio of 64% for the Coopman family and 36% for the reference shareholders of Pluma.
On 18 May 2006 the contribution will be submitted for approval to an Extraordinary General Meeting of Ter Beke NV.  Until this date, both companies will continue to operate independently.
The transaction is subject to a number of customary conditions precedent.  Pluma and Ter Beke anticipate that these conditions precedent will be realised prior to 18 May 2006.

Organisation and structure of the new group

For a considerable time now Ter Beke has been building towards a gradual division of its two core businesses: processed meats and fresh ready meals. The merger of its Processed Meats Division with Pluma allows Ter Beke to accelerate this process and to tailor its organisational structure more closely to the proper dynamic of the two divisions. The group creates a structure which permits the two divisions to develop with adapted methods and speed.

Eddy Van Der Pluym, current Managing Director of Pluma, will become Executive Chairman of the Board of Directors of the Processed Meats Division.  Marc Hofman will be appointed Managing Director of this division. The current management team of Pluma will share in running the division.
Dirk Van de Walle will be appointed Managing Director of the Ready Meals Division and maintains final responsibility over Marketing & Sales for both divisions.
Luc De Bruyckere will, as Executive Chairman of Ter Beke NV, chair the Executive Committee in which, along with Eddy Van Der Pluym and the two aforementioned Managing Directors, will also be sitting: Wim De Cock, director-group manager Operational Services, and René Stevens, CFO of the group. Dirk De Backer is Secretary General of the group.

For more information, please contact:

For Ter Beke
Luc De Bruyckere
Chairman Ter Beke
Tel: +32 (0)9 370 13 00
luc.debruyckere@terbeke.be		 For Pluma
Eddy Van der Pluym
Managing Director Pluma
Tel: +32 (0)3 350 06 19
evp@pluma.be

 

TER BEKE IN BRIEF (after the merger)

Ter Beke (Euronext Brussels : TERB) is an innovative Belgian fresh food group which markets its assortment in 10 European countries. The group has 2 core businesses: processed meats and fresh ready meals, possesses 9 industrial establishments in Belgium, the Netherlands and France and counts over 1,600 employees. A turnover of around 330 million EUR is achieved, based on the 2005 figures.

a. Ter Beke – Pluma Processed Meats Division
b. Fresh Ready Meals Division