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UPDATE: Cadbury agrees “fair” £11.9bn Kraft takeover
Cadbury and Kraft Foods have this morning confirmed that their boards are in the process of “finalising the terms of a recommended offer”.
They are expected to announce a deal worth up to 850p a share for control of the UK-based confectionery giant. Of the total offer, 500p is expected to be in cash and the remainder in stock.
Cadbury’s decision is believed to have come after Kraft raised its offer from £10.5bn to about £11.7bn, or roughly 761p per Cadbury share to 840p a share, plus a 10p a share dividend to Cadbury shareholders.
Paul Hoskins of Reuters news agency has compiled a list of details, which include:
- Combined group will be number one in the chocolate and confectionery, overtaking Mars.
- Combined revenues of close to $60bn in 2008 mean Kraft remains world’s second biggest food group behind Nestlé.
- Cadbury shareholders will receive 500 pence cash and 0.1874 new Kraft share for each Cadbury share.
- Offer values Cadbury at approximately £11.9bn.
- Cadbury says considers offer fair and reasonable.
- Kraft sees pretax cost savings of at least $675m annually realised by the end of the third year at an implementation cost of $1.3bn.
- Increased scale for both companies in developing markets such as Brazil, Russia and China, where Kraft has a stronger presence, and India, Mexico and South Africa, where Cadbury holds leading positions.
- Kraft has given assurances that existing contractual employment rights, including pension rights, of all Cadbury employees will be fully safeguarded.
Source: Reuters
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