Kraft has reached a tentative deal for a friendly takeover of Cadbury, agreeing in principle to pay about $19 billion in cash and stock for the confectioner, people briefed on the matter said on Monday. If realized, the deal would create a global food giant that would unite Kraft with Cadbury . Together, the two companies would have more than $50 billion in revenue and a big presence in markets globally.Most recently Mars buying the Wm. Wrigley Jr. Company in 2008 for $23 billion became the biggest confectioner in the world .
The tentative deal for Cadbury would end a four-month battle between Kraft and Cadbury. Under the terms of the proposal, Kraft will pay 840 pence ($13.70) for each Cadbury share, while Cadbury will pay out a special dividend of 10 pence a share. The offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday. The majority of the increase was in the cash component, which was raised to £5 a Cadbury share, from £3, a person briefed on the matter said.
The agreement is expected to be announced as soon as Tuesday which is the last day Kraft can raise its offer under British takeover rules.
The deal had started with Kraft making public an unsolicited $16.7 billion bid for Cadbury in early September. The Cadbury management quickly derided the offer as too low and dismissed the prospect of being absorbed into what it called a slow-growing food conglomerate.
From the beginning, speculation mounted among investors that another bidder could step in, forcing Kraft to raise its original offer. Representatives for Cadbury have held talks with Hershey, the American company that Cadbury had viewed as a preferable merger partner, according to people briefed on the matter. For Hershey, buying Cadbury would prevent it from being relegated to a mostly domestic company. Hershey moved closer to making a bid in recent days, lining up more than $10 billion in financing, these people said.
Hershey had been waiting for Kraft to unveil its final offer on Tuesday before it made its final decision on a bid, but analysts have said that Hershey would most likely be unable to top the much larger Kraft in a bidding war.
In this blog I try to compile the news related with food industry. This includes food companies, retailers, ingredients, regulations, mergers&acqusitions and others. In each post I try to designate the source of the news and add a link to the original document.
I hope you find it useful. For any comments please feel free to send me an email (turgut@getfoodnews.com). You can post your comments inside the boxes appearing at the end of each posting when clicked the headline.
