Kraft Foods Inc. (KFT), the No. 1 U.S. food company, said Monday it will acquire the Spanish and Portuguese units of United Biscuits, along with the rights to Nabisco trademarks in the European Union, Eastern Europe, the Middle East and Africa.

The acquisition of the Iberian businesses and Nabisco rights is worth about $1.07 billion, according to the company.

United Biscuits had held the Nabisco rights, which were originally Kraft's, since 2000.

The deal, expected to close in the third quarter, also includes rights to United Biscuit's local biscuit brands and the company's Iberian businesses and all seven plants and 1,300 staffers in Iberia.

The deal is being financed by about $548 million in debt plus $522 million of the value for the redemption of Kraft's outstanding investment in U.B., which is primarily deep discount securities.

The deal is expected to help Kraft earnings by about 2 cents during the first year.