Kraft, Cadbury Ink $19.5 Billion Deal

LONDON—Kraft Foods, Inc. announced preliminary approval of its $19.5 billion purchase bid for Cadbury. If approved by shareholders, the deal will create the biggest candy company in the world.

The deal, comprising 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, is a 9% premium to its previous offer, and 50% higher than Cadbury’s market value before Kraft announced its takeover bid last fall.

As reported by Forbes, the Kraft-Cadbury combination will create a portfolio with more than 40 confectionary brands, each with annual sales in excess of $100 million.

“We have great respect for Cadbury’s brands, heritage and people,” said Irene Rosenfeld, chairman and CEO, Kraft Foods. “We believe they will thrive as part of Kraft Foods. This recommended offer represents a compelling opportunity for Cadbury shareholders, providing both immediate value certainty and upside potential in the combined company. For Kraft Foods shareholders it transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline.”

Commenting on the offer, Roger Carr, chairman, Cadbury, said: “We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world. We will now work with the Kraft Foods’ management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees.”