Uxbridge / UK. (cb) After months of wrangling, Kraft Foods Inc. sealed a friendly deal to buy British candy maker Cadbury PLC for about 11,9 billion GBP. Kraft Foods CEO Irene Rosenfeld injected more cash into her bid and dropped the number of new shares in the offer to win over Cadbury Chairman Roger Carr. The deal would create the world´s biggest confectioner, and analysts see little likelihood of a counterbid.
The cash-and-stock agreement, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 8,40 GBP. Shareholders are also set to get a 0,10 GBP special dividend, bringing it to a total of 8,50 GBP. It marks the largest European food and beverage deal on record, according to Thomson Reuters.
«This is a bitter-sweet moment. As a chairman of a public company you are paid and required to focus on shareholder value and the process which we have undertaken has delivered shareholder value», Roger Carr told BBC Radio regarding the end of independence for a British icon.
Cadbury, which employs 45’000 people, has admitted job cuts are an «inevitability», after Kraft Foods made its deal to buy the 186-year old company. Kraft Foods has to borrow seven billion GBP to finance the deal. «The higher the debt level the higher the pressure to cut costs», said a spokesman of the Australian Manufacturing Workers Union in London: «You try to get fewer workers to do more …».
Kraft falls after Buffett comments on CNBC
Shares of Kraft Foods fell 2,2 percent in New York after Warren Buffett in an interview on CNBC said, he had «a lot of doubts» about Kraft´s deal to buy Cadbury. Buffett´s Berkshire Hathaway is a major shareholder in Kraft. To read more about the deal, please visit the Cadbury microsite or the Kraft Foods microsite.
