Kraft takes over Cadbury | The deal is done

Cadbury waited for right price

Kraft, Cadbury

Once mostly known for its mac and cheese, Kraft is now the world's largest candy company. Image from Flickr.

Kraft’s bid to buy Cadbury wasn’t a walk in the park. In the beginning, some doubted that Kraft could take over Cadbury, even after Kraft sold its pizza division to Nestle. However, it appears Cadbury was simply waiting for the right offer.

Media are calling it an “about face,” as Kraft originally planned a hostile takeover of Cadbury. Now, Cadbury has accepted Kraft’s $19.5 billion offer. Many groups are against Kraft buying Cadbury, for reasons ranging from Kraft’s need for debt repair to fear of Cadbury employees losing jobs.

The Kraft empire, Cadbury included

Now that Cadbury has agreed to the deal, Kraft is the world’s largest candy company. The Cadbury name and the company’s other brands will remain the same, but for some groups, that’s not enough of a concession prize.

“This is a very sad day for U.K. manufacturing. A successful, iconic, independent U.K. brand will now be owned by a giant company with massive debt,” said Jennie Formby of the United Union, which had campaigned against Kraft’s offer.

The deal contains no guarantees that Kraft will not switch manufacturing operations, say unions involved. They say this could cost thousands of British jobs.

Company projections

Now that Kraft bought Cadbury, the company owns more than 40 confectionery brands, including Oreo, Toblerone, Dentyne and Dairy Milk chocolates. Each of the 40 brands has annual sales of more than $100 million.

Though groups opposed to the sale expressed concern that Kraft was further exacerbating its extensive debt by spending $20 billion on Cadbury, Kraft’s head executives were quick to express confidence about the future of the company. Kraft CEO Irene Rosenfeld said the deal provides “both immediate value certainty and upside potential.”

“We have great respect for Cadbury’s brands, heritage and people,” Rosenfeld said. “We believe they will thrive as part of Kraft Foods.”

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