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Under the agreement, Kraft will take control of the UB Spanish and Portuguese operations as well as acquiring the rights to Nabisco trademarks such as Chips Ahoy, Oreo and Ritz.
Kraft, who are the world's second largest food company, are seeking to consolidate business in Europe - revenues from which fell 3.1 per cent to $1.61bn (€1.3bn) in the financial second quarter announced in July.
Kraft EU president Joachim Krawczyck said: "Bringing our Nabisco trademarks back into our product portfolio, coupled with the addition of strong local Iberian biscuit brands, is another step in increasing shareholder value as we further improve our growth potential in this key region. This transaction gives us an enhanced platform for innovation and extends Kraft's competitive position in the EU."
United Biscuits had owned the Nabisco rights since 2000 but they were originally held by Kraft.
Today's deal will also give Kraft ownership of seven of Spain's top selling biscuit brands and a 39 per cent share of the Portuguese biscuit market with the Truinfo brand.
A consortium led by UK snack maker Premier Foods is believed to be battling with US private equity firm Blackstone over the remaining UB assets with the final company purchase price expected to reach around $1.7bn (€2.5bn).
