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22 April 2024

Kraft clinches Cadbury takeover

US group Kraft Foods on Tuesday clinched a takeover deal for British confectioner Cadbury, after winning support from shareholders representing 72 per cent of the maker of Dairy Milk chocolate.

The news came after Cadbury's board agreed last month to Kraft's improved cash-and-shares bid worth 11.9 billion pounds ($19.0 billion dollars, 13.6 billion euros) or 850 pence per share, ending a bruising takeover battle.

The shareholders' backing Tuesday will allow Kraft, the world's second-biggest food company, to gobble up Cadbury, whose colourful history as an independent British company dates back to 1824.

Kraft said in a statement that Cadbury investors holding 71.73 per cent of the group have accepted the offer. The US giant also declared its bid "unconditional", meaning all of its takeover conditions have been met.

"Kraft Foods announces that all of the conditions to its recommended final offer have been satisfied or waived and, accordingly, the offer is wholly unconditional," the firm said on Tuesday.

"The final offer will remain open until further notice and at least 14 days' notice will be given if Kraft Foods decides to close the final offer.

"Cadbury securityholders who have not yet accepted the offer are encouraged to do so without delay."

Kraft, whose takeover triumph was masterminded by chief executive officer Irene Rosenfeld, added that it would seek to cancel Cadbury's listing on the London Stock Exchange after it reaches the 75 per cent level.

When Kraft reaches 90 per cent support it will be able to automatically snap up any remaining stock.

The takeover will make Kraft one of the biggest global players in chocolate and confectionery, giving it major brands like Creme Egg and Trident chewing gum to go with Kraft's Toblerone, Milka, Suchard and Cote d'Or.

"The combination of Kraft Foods and Cadbury creates a global powerhouse in snacks, confectionery and quick meals," said Rosenfeld in Tuesday's statement.

"Together we have impressive global reach and an unrivalled portfolio of iconic brands, with tremendous growth potential."

Kraft has meanwhile sought to allay growing concerns that the group could axe jobs following the takeover.

"I warmly welcome Cadbury employees into the Kraft Foods family and look forward to meeting many of them in the days and weeks ahead," Rosenfeld added.

"This combined company has a phenomenal future, and I firmly believe it will deliver outstanding returns to our shareholders."

British business minister Peter Mandelson was set to meet Rosenfeld later Tuesday to discuss Kraft's plans for Cadbury, which employs 5,600 staff at eight factories in Britain and Ireland.

But Jack Dromey, deputy general secretary of Unite -- Britain's biggest trade union -- called for "cast-iron guarantees" over the future of Cadbury workers.

"This is a sad day for Britain. A world-class sector of British excellence is being taken over by a debt-laden US company," Dromey said at a demonstration against the Kraft takeover.

"We now want cast iron guarantees from Kraft about the future for workers, and we want the government to act as guarantor."

One protestor at the central London demonstration was dressed in a gorilla outfit and banging a drum, copying a popular British television advert for Cadbury's Dairy Milk chocolate.

Cadbury, which began as a small grocer's shop in Birmingham, central England, in 1824, has grown into a global operation spanning 60 countries with 45,000 employees.

Kraft, which traces its history to 1903 when JL Kraft started selling cheese from a horse-drawn wagon, also makes Oreo biscuits and Kraft Singles cheese slices.


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