The manufacturing facility in Ontario is small in size with limited equipment. After the closure takes effect in September 2008, production will be relocated to another company plant in Mason City, Iowa.

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In the split-off piece of the deal, Kraft said its shareholders will be able to exchange some or all of their Kraft shares and receive shares of stock in Cable Holdco.

The Cable Holdco stock will then be immediately exchanged for shares of Ralcorp on a one-for-one basis following the merger of Cable Holdco and a Ralcorp subsidiary.

Kraft said Kraft shareholders will own up to 0.6613 shares of Ralcorp for each Kraft share exchanged. The exchange offer will expire on Aug. 4 and will coincide with the closing of the Ralcorp deal.

Kraft said about 30.5 million shares of Cable Holdco will be offered in exchange for Kraft common stock. Once the deal is complete, Kraft shareholders are expected to own about 54 percent of the new Ralcorp with Ralcorp shareholders owning about 46 percent.

Shares of Kraft Foods rose 29 cents to close $29.25, while shares of Ralcorp rose six cents to $50.74 in after-hours trading. During regular trading, Ralcorp shares fell $1.32 to close at $50.68.

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In this split-off transaction, Kraft shareholders will have the option to exchange some or all of their shares of Kraft common stock and receive shares of Cable Holdco common stock.

According to the company, the value of Kraft shares and Cable Holdco common stock will be calculated using the simple arithmetic average of the daily volume-weighted average prices of Kraft common stock and Ralcorp common stock on the New York Stock Exchange on the last three trading days of the offer.

This exchange offer is designed to permit Kraft shareholders to exchange their shares of Kraft common stock for shares of Cable Holdco common stock at a 10% discount to the per share value of Ralcorp common stock, subject to a limit of 0.6613 shares of Cable Holdco common stock per Kraft share.

The Cable Holdco common stock will then immediately be exchanged for shares of Ralcorp common stock on a one-for-one basis following the merger of Cable Holdco and a Ralcorp subsidiary. Ultimately, at the conclusion of this exchange offer and the subsequent merger of Cable Holdco and Ralcorp, Kraft shareholders will own up to 0.6613 shares of Ralcorp for each Kraft share exchanged, the company said.

The exchange is expected to be tax-free to participating Kraft shareholders for US federal income tax purposes.

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"We're excited to have transformed the cheesy taste everyone loves into a crunchy, delicious snack," said Sanford Fink, brand manager, Kraft Foods. "Now people can now enjoy Kraft Macaroni & Cheese Crackers anytime, anywhere ... whether it's on-the-go from activity to activity, as part of a packed lunch for school or a fun after-school snack."

Kraft Macaroni & Cheese Crackers come in three varieties including Cheddar, White Cheddar and Mild Cheddar. Each variety is made with real cheddar cheese. The crackers will be available in stores nationwide beginning this month for a suggested retail price of $2.99. For more information, visit http://www.kraft.com.

About Kraft Foods

Kraft Foods (NYSE: KFT) is one of the world's largest food and beverage companies, with 2007 revenues of more than $37 billion. For more than 100 years, Kraft has offered consumers delicious and wholesome foods that fit the way they live. Kraft markets a broad portfolio of iconic brands in more than 150 countries, including nine brands with revenues exceeding $1 billion: Kraft cheeses, dinners and dressings; Oscar Mayer meats; Philadelphia cream cheese; Maxwell House coffee; Nabisco cookies and crackers and its Oreo brand; Jacobs coffees, Milka chocolates and LU biscuits. Kraft is a fully independent company and is listed in the Standard & Poor's 100 and 500 indexes. The company is a member of the Dow Jones Sustainability Index. For more information, visit the company's web site at http://www.kraft.com.

SOURCE Kraft Foods

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