Kraft Bids for Danone Unit

The deal would be worth $7.2 billion.
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Kraft Foods

(KFT)

has made a binding offer to buy the cookie operations of France's

Groupe Danone

(DA)

for $7.2 billion in cash.

The planned acquisition encompasses Danone's LU, Tuc and Prince brands, along with operations and assets in 20 countries, including 36 manufacturing facilities. The transaction wouldn't include Danone's joint ventures in Latin America and India.

As required by French law, Danone must consult with its Works Council prior to entering into a definitive agreement. Both companies expect the transaction to close by the end of the year.

"This proposed acquisition makes great sense for Kraft," said Irene Rosenfeld, Kraft chairman and CEO, in a press release. "It will increase our presence in snacks -- our fastest growing global segment -- and transform our international business."

During 2006, the businesses to be acquired had revenue of around $2.7 billion.