Kraft, the world's second-largest food and drinks company, is to be reunited with brands including Ritz crackers and Oreo biscuits after buying the southern European arm of Britain's United Biscuits for just over $1 billion (£580.75m).

Buying the division, which covers operations in Spain and Portugal, returns to Kraft the full rights to all Nabisco trademarks, which United Biscuits has held since April 2000.

It also ends the association between the two groups, under which Kraft has held a 25 per cent stake in United Biscuits since the same time, with the remainder held by Cinven, PAI and MidOcean, the buyout groups.

Selling out of the United Biscuits stake is worth $522 million to Kraft, which will finance the rest of the acquisition cost by taking on $548 million of fresh debt. Kraft expects the acquisition to complete in the third quarter and is to book a gain of $243 million as a result of the deal.

Hugh Roberts, the president of Kraft International Commercial, said: "We are delighted to be significantly expanding the global scope of our Nabisco biscuit brands by recovering the licences UB has held since 2000. With our broader portfolio of strong trademarks, we look to achieve even faster growth in this key category."

As well as the rights to Oreo and Ritz in the European Union, Eastern Europe, the Middle East and Africa, Kraft will collect local biscuit brands such as Fontaneda and Filipinos. And it will pick up Iberian canned meat, tomato and fruit juice operations under the Apis and Fruco brands.

The acquisition incorporates seven factories that were owned by United Buscuits and employing 1,300 people. Together the operations generated $400 million of revenues last year.

Today's sale follows the appointment of Goldman Sachs in February to carry out a strategic review of the business. It is now likely that Goldman will begin the process of selling United Buscuits' northern European division.

As an existing part owner of United Biscuits Kraft had the right to match any rival bidder if it chose to do so. However, with the American group ending its ownership level of the British firm following completion of the sale, that right looks likely to disappear.

Kraft has previously been interested in a bid as part of a consortium for the entire British group, although a failure to agree on price meant that this did not materialise.

Among Kraft's existing brands are Jacobs crackers, Maxwell House coffee and Philadelphia cream cheese.

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