Conclusion of merger agreement

AS Kalev subsidiary AS Kalev Paide Tootmine and its subsidiary Tere AS entered
into a merger agreement on 30 Oct 2008 in which the merger between the parties
was agreed so that Tere AS (the acquiring company) would merge with AS Kalev
Paide Tootmine (the company being acquired). The company being acquired shall
be considered wound-up upon completion of the merger proceedings. 
Upon merger, the company being acquired shall assign all of its assets to the
acquiring company. The balance sheet date shall be 1 December 2008. The Tere AS
shares transferred to AS Kalev in the course of the merger shall grant the
right to a share of profits in the acquiring company from the moment that the
merger is entered into the Commercial Register. The acquiring company, Tere AS,
grants to the shareholder of the company being acquired, AS Kalev, precisely
the same rights that the shareholder of the acquiring company holds under law
and articles of association. 

The members of the management board and supervisory board participating in the
merger will not be granted any special advantages in connection with the
merger. The members of the management board and supervisory board of Tere AS
shall remain the same - the managing director of Tere AS is Ülo Kivine and the
members of the supervisory board are Oliver Kruuda, Taavi Toots and Allan
Viirma. 
Upon merger, the entire share capital of the company being acquired will be
replaced with the share capital of the acquiring company. The replacement ratio
of the shares is such that AS Kalev will receive 8,000,000 Tere AS shares in
exchange for its 42,974,324 shares in AS Kalev Paide Tootmine. After the
merger, the share capital of the acquiring company will be 80,000,000 kroons
and all 8,000,000 shares of the acquiring company with a nominal value of 10
kroons (0.64 EUR), which forms 100% of the shares of the acquiring company,
shall belong to AS Kalev. 
AS Kalev Paide Tootmine acquired 100% of the shares of Tere AS under a contract
of sale entered into on 29 September 2008. The sales transaction was completed
on 17 October 2008. Information on the financial data for Tere AS was released
by AS Kalev in its press release of 29 September 2008. 
The abovementioned merger shall not have an influence on the share price of AS
Kalev as in essence two AS Kalev subsidiaries operating in the same field are
being merged and there will be no material change in the issuer's economic
activity. 
The parties to the merger agreement are related persons with respect to AS
Kalev for the purposes of the Tallinn Stock Exchange rules. 

Allan Viirma
Head of the legal service
688 6616