Ppb Group Berhad (“Ppb” Or “Company”)

PPB GROUP BERHAD (“PPB” OR “COMPANY”)

I PROPOSED ISSUANCE OF 55,781,250 NEW ORDINARY SHARES OF RM1.00 EACH IN FFM BERHAD (“FFM”) (“FFM SHARES”), A WHOLLY-OWNED SUBSIDIARY OF PPB, TO PGEO GROUP SDN BHD (“PGEO”), A WHOLLY-OWNED SUBSIDIARY OF WILMAR INTERNATIONAL LIMITED (“WILMAR”) (“PROPOSED FFM SHARE ISSUANCE”); AND

II POTENTIAL ACQUISITION(S) BY WAIKARI SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF FFM, OF 20% EQUITY INTEREST(S) IN SELECTED SUBSIDIARIES OF WILMAR IN THE PEOPLE’S REPUBLIC OF CHINA (“CHINA”) (“SELECTED COMPANIES”) (“POTENTIAL ACQUISITION(S)”)

(COLLECTIVELY REFERRED TO AS THE “PROPOSALS”)

1. INTRODUCTION

On behalf of PPB, CIMB Investment Bank Berhad (“CIMB”) is pleased to announce that FFM has entered into a subscription agreement dated 2 December 2010 with PGEO for the Proposed FFM Share Issuance (“Subscription Agreement”).

On this even date, FFM has also entered into a memorandum of understanding with Wilmar for the Potential Acquisitions (“MOU”).

2. DETAILS OF THE PROPOSED FFM SHARE ISSUANCE

2.1 Pursuant to the Subscription Agreement, FFM proposes to issue 55,781,250 new FFM Shares, equivalent to 20% of FFM’s total enlarged issued and paid-up share capital to PGEO at an issue price of RM6.7786 per new FFM Share or a total cash subscription sum of approximately RM378 million (“Subscription Sum”). Both parties have agreed that the basis of the determination of the issue price of the new FFM Shares shall exclude certain identified assets and investment holdings held or previously held by FFM or its subsidiaries and / or associated companies (“Excluded Assets”), which shall accordingly be transferred or distributed to PPB or its subsidiary(ies) (if not already done), notwithstanding the completion of the Proposed FFM Share Issuance under the Subscription Agreement (“Completion Date”).

2.2 The Subscription Sum was determined after taking into consideration, amongst others:

(i) FFM’s consolidated net assets based on its audited financial statements for the financial year ended 31 December 2009 (after adjusting for the Excluded Assets) of RM1.29 billion;

(ii) the historical and future performance and earnings potential of FFM (after adjusting for the Excluded Assets); and

(iii) the intention of FFM to declare a special dividend up to the amount of the Subscription Sum prior to the Completion Date (“Proposed FFM Special Dividend”).

2.3 The new FFM Shares to be issued pursuant to the Proposed FFM Share Issuance will, upon allotment and issue, rank equally in all respects with the existing FFM Shares, save and except that PGEO shall not have any rights, interests, entitlements and benefits whatsoever in and to any dividends declared on and from the date of the Subscription Agreement up to the Completion Date, provided such dividends (before taking into account any dividends arising from the Excluded Assets) shall not exceed the amount of the Subscription Sum, and it irrevocably waives and renounces all of its rights, interest, entitlements and benefits to any dividends in respect of or arising from the Excluded Assets on and from the date of the Subscription Agreement.

2.4 The Proposed FFM Share Issuance is conditional upon the approval of:

(i) the Ministry of International Trade and Industry (and any conditions, if imposed, to be acceptable to both FFM and PGEO); and

(ii) the shareholders of FFM and PGEO.

3. EFFECTS OF THE PROPOSED FFM SHARE ISSUANCE

3.1 Share capital and substantial shareholders’ shareholding

The Proposed FFM Share Issuance will not have any effect on the issued and paid- up share capital of PPB and the substantial shareholders’ shareholdings in PPB.

3.2 Earnings

Assuming the Proposed FFM Share issuance is completed in the first quarter of 2011, the Proposed FFM Share Issuance is not expected to have any material effect on the earnings and earnings per share of the PPB group for the financial year ending 31 December 2010.

3.3 Net assets (“NA”) and gearing

Based on the latest audited consolidated financial statements of PPB as at 31 December 2009 and on the assumption that the Proposed FFM Share Issuance had been completed on 31 December 2009, the proforma effects of the Proposed FFM Share Issuance on PPB group’s NA and gearing are set out below:

Audited as at After the Proposed FFM 31 December 2009 Share Issuance* RM 000 RM 000

Share capital 1,185,500 1,185,500 Reserves 12,901,042 13,099,617 Shareholders’ funds / NA 14,086,542 14,285,117

No. of ordinary shares in issue 1,185,500 1,185,500 (000) NA per ordinary share (RM) 11.88 12.05 Total borrowings (RM 000) 120,467 120,467 Gearing (times) 0.009 0.008

Note:

* After taking into account the Proposed FFM Special Dividend of approximately RM378 million.

3.4 Shareholding structure of FFM

Upon completion of the Proposed FFM Share Issuance, FFM will be 80% owned by PPB and 20% owned by PGEO.

4. INFORMATION ON THE PARTIES INVOLVED IN THE PROPOSED FFM SHARE ISSUANCE

4.1 Information on FFM

FFM, a wholly-owned subsidiary of PPB, was incorporated in Malaysia in 1962. It was listed on the then Kuala Lumpur Stock Exchange on 11 August 1982 and was subsequently privatised and delisted on 14 October 2004.

The principal activities of FFM and its subsidiary companies consist of investment holding, grains trading, flour milling and animal feed manufacturing. FFM, its subsidiaries and associated company own and operate four (4) flour mills in Malaysia and one (1) each in Vietnam, Indonesia and Thailand respectively. The FFM group is currently constructing its fifth flour mill in Malaysia.

4.2 Information on PGEO

PGEO was incorporated on 1 June 2000 and is held by Wilmar (65.76% directly), and the balance 34.24% held by PPB Oil Palms Berhad (a wholly-owned subsidiary of Wilmar).

The principal activities of the PGEO group are the trading and marketing of edible oils and investment holding. Its subsidiaries and associated companies are engaged in the processing and marketing of edible oils and related products, manufacturing of animal feed ingredients, generation and sale of steam energy, broker in commodity futures, and investment holding.

4.3 Information on Wilmar

Wilmar was incorporated in the Republic of Singapore on 14 August 1999 and was listed on the Singapore Exchange Securities Trading Limited on 20 July 2000.

The principal business activities of the Wilmar group include oil palm cultivation, oilseeds crushing, edible oils refining, specialty fats, oleochemicals and biodiesel manufacturing and grains processing, the manufacture and distribution of fertilisers, and shipping. Wilmar has established an integrated agribusiness model that captures the entire value chain of the agricultural commodity processing business, from origination and processing to the branding, merchandising and distribution of a wide range of agricultural products.

5. ESTIMATED TIME FRAME FOR COMPLETION

Barring any unforeseen circumstances, and subject to the relevant approvals being obtained, the Proposed FFM Share Issuance is expected to be completed in the first quarter of 2011.

6. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS

To the best of the knowledge of the Directors, none of the Directors and / or major shareholders of PPB or persons connected to them have any interest, direct or indirect, in the Proposed FFM Share Issuance.

7. SALIENT TERMS OF THE MOU

On this even date, FFM has also entered into the MOU with Wilmar to set out the intentions of the parties and facilitate discussions and negotiations for the Potential Acquisition(s).

The Selected Companies pursuant to the Potential Acquisition(s) operate substantially in the same core business as FFM namely grains trading and processing and sale of flour and feed products and are spread over a large geographical area in China. It is the understanding of FFM and Wilmar that the purchase price for the sale and purchase of equity interests in the Selected Companies shall be negotiated and determined on a willing buyer and willing seller basis, after taking into account the net assets, capital contribution, holding cost and incremental land value. Further details of the Potential Acquisition(s) will be announced upon signing of the respective sale and purchase agreement(s).

8. RATIONALE AND BENEFITS OF THE PROPOSALS

The Proposed FFM Share Issuance represents an opportunity for the FFM group to tap on the distribution network of the Wilmar group in countries in which the FFM group does not yet have a presence (i.e. China), and other countries in which the FFM group already operates (i.e. Vietnam and Indonesia). FFM would have an opportunity to expand into fast-growing economies, especially in countries where the per capita flour consumption is still relatively low and is expected to increase in future. Further, FFM would be able to gain a larger market share outside Malaysia more easily. There will be an immediate increase in access points to potential customers via the Wilmar group’s network, thus achieving greater economies of scale.

The Proposed FFM Share Issuance will also result in an inflow of funds to the PPB group which could be used to finance its expansion plans downstream into the food processing segment including making ready-to-eat products for the Malaysian market and / or for the purpose of financing the Potential Acquisition(s).

The Potential Acquisition(s) would enable FFM to be able to gain immediate access to the infrastructure and customer base in a country which may be difficult and time-consuming to build from scratch. Further, some of the Selected Companies have local entities as shareholders. These local partners may help navigate the complexities of operating in numerous regions which may have different regulations, hence potentially reducing the market risk of entering a new market in a foreign country.

The Potential Acquisition(s) are also in line with the PPB group’s strategy of overseas expansion for its flour business and is expected to contribute significantly to the group revenue moving forward.

9. PERCENTAGE RATIO APPLICABLE TO THE PROPOSED FFM SHARE ISSUANCE

The highest percentage ratio applicable for the Proposed FFM Share Issuance pursuant to Paragraphs 10.02 and 10.12 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 2.93% (after aggregating the previously announced disposal of Minsec Engineering Services Sdn Bhd, as it involves the same transacting party, viz PGEO).

10. ADVISER

CIMB has been appointed as the adviser to PPB for the Proposals.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Subscription Agreement and MOU are available for inspection at the registered office of the Company at 17th Floor, Wisma Jerneh, 38 Jalan Sultan Ismail, 50250 Kuala Lumpur, during normal business hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 2 December 2010.