Kraft has high hopes after sealing Cadbury deal

20 January 2010

NORTHFIELD, Illinois: Kraft believes Cadbury's brands will "thrive" under its ownership, having reached an agreement to buy the confectionary specialist for £11.9 billion ($19.4bn; €13.6bn).

The Illinois-based organisation originally bid £10.2bn for the maker of Dairy Milk and Bournville in September last year, and will fund its latest offer via a mixture of cash and shares.

Alongside "meaningful cost savings and revenue synergies", Kraft argued in a statement that Cadbury "represents a strong and complementary strategic fit" to its existing operations.

The newly-formed entity would boast around 40 confectionary brands with annual sales of more than $100 million, and enjoy a strong presence in emerging markets like Brazil, Russia, India, China and Mexico, it added.

Moreover, it stated that the resources available would allow for the adoption of a "best of both" approach to sales, marketing, distribution and management.

Irene Rosenfeld, chief executive of Kraft, said "we have great respect for Cadbury's brands, heritage and people. We believe they will thrive as part of Kraft Foods."

Looking to Kraft's own activities, she suggested that the takeover "transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline."

Roger Carr, the chairman of Cadbury, had been cautious regarding any potential deal, but said that Kraft had made a "commitment" 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," he added.

Data sourced from Kraft; additional content by Warc staff