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Kraft deal ‘too sweet’ for Cadbury to resist

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American food retailer Kraft has finally purchased Britain’s leading chocolate company, Cadbury, for a reported £12bn, marking the end of drawn out negotiations and Britain’s largest commercial takeover since the onset of the recession.

Cadbury had rejected numerous offers for the 186-year-old company but board members decided this week that the tabled offer was “good value” and Cadbury will join Kraft’s extensive list of products, which includes Ritz Crackers and Philadelphia cheese.

Shareholders were asked to accept the offer which will see Kraft pay 840 pence a share, 500 pence in cash and the rest in Kraft shares, after rival investors decided not to challenge the American’s bid.

“We believe the offer represents good value for Cadbury shareholders… and will now work with the Kraft Foods’ management to ensure the continued success and growth of the business,” said Cadbury’s chief executive Roger Carr.

Previous offers from Kraft valued the company at £10.5bn but were quickly rejected by the Cadbury’s board, accusing Kraft of trying to “buy Cadbury on the cheap”.

But the improved bid has not been welcomed by all those associated with British industry.

Current employees have voiced their concerns over Kraft’s expected cuts in staff numbers while experts believe the American takeover has shown the current vulnerability of Britain’s commercial market.

Speaking before the improved bid, Felicity Loudon, great-granddaughter of founder George Cadbury, voiced her concerns for the state of British industry:

“My fear is this will all become history and it will be too late. I think the predators are circling. It’s desperately sad that yet another British icon could go abroad,” said Ms Loudon.

More than 50 UK companies have succumbed to foreign investment over the past few years, including market leaders Boots, Jaguar Land Rover and P & O, and Business Secretary Lord Mandelson has been vocal in his criticisms of the Kraft bid, warning:

“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.”

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Written by Andrew Hodges

January 24, 2010 at 5:13 pm

Posted in Comment, LinkedIn

Tagged with ,

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