Kraft Inc. said Thursday it was selling its fast-growing Duracell battery division to a group led by management and the investment firm Kohlberg Kravis Roberts & Co. in a cash deal worth $1.8 billion. Kraft said it agreed to sell Duracell Inc., the world's leading maker of alkaline consumer batteries, to concentrate on its core food business. Proceeds from the sale would be used to buy back up to 12 million Kraft shares, to reduce debt and for possible food-related acquisition, the company said. ``... We are excited about the many opportunities available to Kraft in the food industry, and the sale of Duracell will enable us to focus our total management and financial resources on those opportunities,'' said Kraft Chairman John M. Richman. Kraft informed its shareholders of the definitive agreement at its annual meeting Thursday in Chicago. Kraft, which acquired Bethel, Conn.-based Duracell in 1980, had announced in December that it planned to sell the unit. Henry R. Kravis, a partner in New York-based Kohlberg Kravis, called the agreement ``the first step in the creation of a great new independent consumer-products company.'' ``We are very excited about the future growth prospects of the company and our future association with the management and employees of Duracell,'' he said. Some analysts expressed surprise at the price Kohlberg Kravis agreed to pay for Duracell, which had been widely expected to fetch between $1 billion and $1.2 billion. ``It never ceases to amaze me what a good brand is worth in today's marketplace,'' said John W. McMillin of Prudential-Bache Securities Inc. ``This was pleasant news for Kraft shareholders.'' In composite trading on the New York Stock Exchange, Kraft rose $1.50 a share to close at $53.50. McMillin said Kohlberg Kravis probably was attracted by Duracell's strong growth potential. Duracell, which has about 9,000 employees, had an operating income of $140 million and sales of $1.1 billion last year. Kraft's 1987 sales, excluding Duracell, were $9.9 billion. Duracell's copper-top alkaline batteries account for about 28 percent of all U.S. consumer battery sales. The company is tied with Ralston Purina Co.'s Eveready unit for the lead in domestic sales of alkaline batteries, the fastest-growing segment of the battery market. Together, Eveready and Duracell have more than 80 percent of the domestic alkaline-battery market, McMillin said. Duracell does not compete in the carbon-zinc battery market, which is dominated by Eveready. ``With all these Walkmans and portable tape recorders that have to use batteries, the alkaline segment has been exhibiting strong volume growth and that is what had to attract these investors,'' McMillin said. Analysts said they did not expect Duracell to diversify as a stand-alone company. ``It could happen in time, but certainly not immediately,'' said Lawrence Adelman, an analyst with Dean Witter Reynolds Inc. in New York. ``When you do a leveraged buyout you've got to use the cash generated internally to reduce debt, so you've got to pretty much stick to your own business.'' Duracell is being sold to Duracell Holdings Corp., the new company formed by Kohlberg Kravis and Duracell's management. Kohlberg Kravis specializes in leveraged buyouts, in which a company is acquired mainly through borrowed funds repaid from the target company's profits or asset sales.