Kraft Acquires Cadbury in Multi-Billion-Dollar Takeover

Jan. 19, 2010
Deal valued at $18.9 billion

Cadbury, a monument to the British chocolate bar, fell on Jan. 19 to U.S. giant Kraft by accepting an offer worth 11.5 billion pounds which creates a world leader in food and confectionery.

The pair announced hat Cadbury management had agreed to a takeover worth 840 pence per share -- valuing the group at the equivalent of 13.1 billion euros or $18.9 billion.

Cadbury-Kraft will provide large cost savings and create a global market leader, with annual sales totaling more than $100 million.

The takeover will end more than 180 years of history for the colourful maker of Dairy Milk chocolate bars and Trident chewing gum. Cadbury, the world's second-biggest confectionery company behind Mars, also produces chocolate bar brands Crunchie, Fudge, Flake and Wispa.

Kraft, the world's second-biggest snacks group after Nestle, makes numerous well-known products including Dairylea cheese, Milka and Toblerone chocolate and Oreo cookies.

"Kraft Foods believes a combination represents a strong and complementary strategic fit, creating a global confectionery leader with a portfolio of more than 40 confectionery brands each with annual sales in excess of $100 million," a company statement said.

News of a friendly takeover also marks the end of months of hostilities over the control of Cadbury, which began life as a small grocer's shop in Birmingham, central England, in 1824.

In reaction to the announcement, British Prime Minister Gordon Brown said that his government was determined to help save jobs at Cadbury. "We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure," Brown said.

Cadbury employs 45,000 staff worldwide, including 5,600 staff at eight factories in Britain and Ireland.

There have been fears about British job losses, with trade union Unite warning Kraft would be saddled with huge debts leading them to axe 7,000 posts at Cadbury and 20,000 at the company's sub-contractors.

Copyright Agence France-Presse, 2010

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