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Tuesday Jan 19
Cadbury agrees £11.7bn Kraft takeover
After months of hostile talks, British confectioner Cadbury has finally agreed to an £11.7 billion takeover by US food giant Kraft.
The 186-year-old British company, renowned for Dairy Milk chocolate, is set to advise shareholders to accept the latest bid of 840p a share.
Kraft, which is renowned for brands such as Kenco coffee and Oreo biscuits, will pay 840p for each Cadbury share and agree to pay a 10p-per-share dividend. The deal is a significant increase on the original offer of 761p.
However, earlier this month, Roger Carr urged shareholders not to let Kraft “steal your company with its derisory offer“.
Mr Carr criticised Kraft’s management and its track record of “overpromising and underdelivering” and said: “We do not need to be subsumed into a lumbering, corporate monolith to achieve our aims.”
The takeover was also strongly opposed by Business Secretary, Lord Peter Mandelson.
Last month, Lord Mandelson sent a warning shot to Kraft saying: “If you think that you can come here and make a fast buck you will find that you face huge opposition from the local population . . . and from the British Government.”
The takeover has raised fears of job losses at Cadbury, which has a global workforce of 45,000 with over 9,000 in Britain.
The Unite union warned that Kraft plans at least 10,000 job cuts worldwide in order to cut costs.
In 1993, Kraft bought British chocolate company Terry’s and closed its York factory in 1995.
However, at the time of the first bid in September, Kraft said a takeover would secure UK jobs, while keeping open Cadbury’s Somerdale factory, which is currently scheduled to close.
Kraft also said the deal would invest in Cadbury’s plant in Bournville, Birmingham.
According to the US food group, a combination of the two firms would create a “global powerhouse” in food and confectionery, with annual sales of around US$50 billion.
Source: www.financemarkets.co.uk - 19 January 2009
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