The Cross-border Merger of Kraft and Cadbury

The Cross-border Merger of Kraft and Cadbury Term Paper example
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Finance & Accounting
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An overview of the Kraft –Cadbury merger In February 2010, Cadbury gave in to Kraft’s US$ 19.7 billion takeover after a fierce battle lasting over 100 days. Kraft Foods US is a major confectionary maker…

Introduction

An overview of the Kraft –Cadbury merger In February 2010, Cadbury gave in to Kraft’s US$ 19.7 billion takeover after a fierce battle lasting over 100 days. Kraft Foods US is a major confectionary maker. The British chocolate maker had earlier in 2009, rejected a US$ 16.4 billion hostile takeover bid from Kraft, stating that the value did not represent the intrinsic value of the Cadbury brand. Industry experts believe that the combined group is the number one in chocolate and confectionary segments, as well as the second in the high growth gum segment (Ralph & Olesseni, p.61). Cadbury had agreed for 840 pence per share which would give them a total valuation of $19 billion. Media reported that Cadbury slipped into US giant Kraft Foods and the British Prime Minister committed that the jobs in UK could be protected. It was estimated that Cadbury employees numbered more than 45000 worldwide. It was expected, Kraft Cadbury combined would generate large cost savings, enabling Kraft to become a global market leader. The conglomeration would also generate annual sales of more than $ 50 billion. The market reaction was mixed especially from UK where the fear of job loss came up and cultural reaction was that the country’s honor namely Cadbury’s brand, had been given to US. Kraft Foods was one of the major US confectionery manufacturers with net revenue of $42 billion and operating in 150 countries as of 2008. ...
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