Kraft and Cadbury: It's a WrapJames Thompson
Cadbury was finally acquired for £11.4bn by the US food giant Kraft yesterday, closing the door on nearly 200 years of independence for the Dairy Milk maker.
Kraft (KFT), which makes Philadelphia cream cheese and Oreo biscuits, said that holders of 71.7 per cent of Cadbury (CBY) shares had accepted its final offer, sufficient for it to take control of the Bournville, Birmingham-based manufacturer and create a company with global sales of $50bn in 160 countries.
The rubber-stamping of the deal brings to an end the five-month battle for Cadbury, which was often a bitter war of words until Kraft made its improved offer of 850p a share, including a special dividend of 10p, last month.
It also came on the day that Lord Mandelson met Irene Rosenfeld, the chief executive and chairman of Kraft, to discuss UK job losses. Earlier yesterday, an entourage of Cadbury employees had protested outside Parliament.
A representative of the Unite union reportedly said: "Ministers must make it abundantly clear that closures and mass redundancies will not be accepted by the British government or the British people." Kraft has not yet indicated how many jobs will be lost, as part of the deal's slated $1.3bn of restructuring costs.
Kraft will apply for Cadbury to be de-listed from the London Stock Exchange after 75 per cent of the UK company's shareholders sell their shares to Kraft, which they are widely expected to do. Once it receives acceptances of 90 per cent, the US giant will acquire the remaining Cadbury shares.
Yesterday, Ms Rosenfeld said: "The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals." She added. "Together we have impressive global reach and an unrivalled portfolio of iconic brands, with tremendous growth potential."
On Monday, Unite's national officer for food and drink, Jennie Formby, said: "Our workers at Cadbury are extremely worried that what was a bright future for them will be dimmer under Kraft." She added: "The workforces have been kept in the dark too long. Specific questions have been put to Ms Rosenfeld by our European colleagues, including will the takeover lead to the closure of existing plants and will there be lay-offs? All these questions need urgent answers."
Kraft acquired Terry's chocolate in 1993 and vowed not to close its York headquarters. However, the US company sold off the building by 2005, as it moved production to Poland.
It made its first indicative offer at 745p, but this was lambasted by Cadbury's chairman, Roger Carr, as being "derisory".
He also called Kraft a "low-growth conglomerate" and went on to urge shareholders not to let it "steal your company". Kraft publicly questioned whether Cadbury could actually meet its revised targets for the next three years.
However, on 19 January, Kraft made a final offer of 850p a share, which the board of Cadbury recommended.