Dairy Milk in my Oreo, Irene
Warren Buffet invested Kraft was finally able to up the offer beyond 840p without issuing additional equity and convince Cadbury to sign the dotted line, with the deal announcement after Tuesday afternoon’s deadline expires in London. The Nabisco acquisition is now history as Cadbury’s addition to Kraft brings together a chocolate empire worth $50 billion in sales, trailing sales being $8.5b for Cadburys and rising at 15-20% per year. Kraft already has a $40 billion portfolio( DiGiorno Frozen Pizzas were sold to Nestle for $3.7 billion last week to get the extra cash)
Kraft has reached a deal for a friendly takeover of Cadbury, tentatively agreeing to pay about $19 billion in cash and stock for the confectioner, people briefed on the matter said on Monday.
Uniting Kraft and its Oreo cookies and Ritz crackers with Cadbury and its Trident gum and Dairy Milk chocolates would bring together a global food giant with more than $50 billion in revenue and a big presence in markets globally.
Over the last decade, food companies have sought to gain scale by combining with each other, most recently with Mars buying the Wm. Wrigley Jr. Company in 2008 for $23 billion.
The tentative deal for Cadbury would end a four-month battle for control of the British candy maker.
Under the terms of the proposal, Kraft will pay 840 pence for each Cadbury share, while Cadbury will pay out a special dividend of 10 pence a share. The offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday. The majority of the increase was in the cash component, which was raised to £5 a Cadbury share, from £3, a person briefed on the matter said.
The takeover agreement is expected to be announced as soon as Tuesday, this person said, which is the last day Kraft can raise its offer under British takeover rules. People with knowledge of the matter cautioned that the talks were still continuing, so a deal might still fall apart.
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