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Canada Bread to Become a Global Bakery Company Through the Purchase of Maple Leaf Bakery for $266 Million Pending Shareholder Approval

Toronto, Ontario –Maple Leaf Foods Inc. (TSX:MFI) and Canada Bread Company,
Limited (TSX:CBY) today announced that they have reached an agreement in
principal whereby Canada Bread would purchase all of Maple Leaf Foods’ other
bakery operations for $266 million, inclusive of debt assumption. Completion of
the transaction is subject to finalization of documentation and approval by a
majority of Canada Bread’s shareholders, excluding Maple Leaf Foods.

The bakery operations of Maple Leaf Foods, collectively referred to herein as
“Maple Leaf Bakery”, consist of all of its existing bakery operations in the
United States and the United Kingdom, including the recently purchased Grace
Baking Company (“Grace Baking”) in the United States. Maple Leaf Bakery U.S. is
a leading supplier of frozen par-baked bread, rolls and bagels in the United
States. Grace Baking is a leading independent producer of fresh and frozen
artisan bread products, located in San Francisco, California. Maple Leaf Bakery
U.K., including the recently acquired New York Bagel Company, is the largest
bagel producer in the United Kingdom.

“Both Maple Leaf Bakery and Canada Bread have established solid sales and
earnings momentum over the past year,” said Mr. Michael H. McCain, President
and Chief Executive Officer of Maple Leaf Foods. “This ownership restructuring
provides Maple Leaf, through its ongoing 68% ownership in Canada Bread, a
continuing interest in the bakery business, where we have a substantial
long-term commitment. Fully integrating these two organizations will further
enhance growth opportunities and transform Canada Bread from a Canadian baking
company to a global baking company with significant capabilities across fresh,
par-baked and artisan bread product lines.”

“Bringing all of Maple Leaf Foods’ bakery operations together will allow us to
fully integrate our management, technologies, operating expertise and market
strengths,” added Mr. Richard Lan, Chief Operating Officer, Bakery Products
Group, Maple Leaf Foods and President and Chief Executive Officer of Canada
Bread. “Combining these highly complementary businesses will establish
immediate and significant geographic diversification of Canada Bread’s
operations, and provide it with a strong base of expertise and capabilities in
par-bake and artisan bread lines to augment its fresh bread business. Finally
it will transition these organizations into a single strong organization with
common interests and business objectives.”

Canada Bread has a significant business relationship with Maple Leaf Bakery
U.S. Sales from Canada Bread to Maple Leaf Bakery U.S. for the year ended
December 31, 2001 and for the six months ended June 30, 2002 amounted to $72.4
million and $39.1 million respectively. Profit included in Canada Bread’s
pre-tax profit on these sales were $11.3 million and $6.3 million respectively.

The following table reflects the combined operating results for Maple Leaf
Bakery, excluding Grace Baking (Cdn$ millions):