Cadbury bites Kraft bullet

London: Cadbury Plc agreed to an improved £11.9-billion (Dh71.4 billion, $19.7 billion) offer from Kraft Foods Inc., ending more than four months of resistance and creating the world's largest confectioner.

Cadbury investors will get 840 pence a share, including 500 pence in cash and the rest in stock, Kraft said in a statement yesterday. Cadbury will also pay its holders an additional 10-pence dividend once the offer is unconditional. The revised bid is about 9 per cent higher than Kraft's previous bid of 769 pence, and consists of 40 per cent stock and 60 per cent cash.

Modest win

"It looks like a modest win if not a home run for Cadbury shareholders," said John Haynes, who helps manage £12 billion, including 5 million Cadbury shares at Rensburg Sheppards Plc in London. £5 "in cash is enough to keep us happy, and Kraft is a better investment with Cadbury than they were without."

Kraft chief executive officer Irene Rosenfeld increased the original bid after Cadbury rejected it as "derisory" and Hershey Co. prepared to mount a rival offer. A purchase by Kraft displaces Mars Inc. as the world's biggest candy maker, according to Euromoniter data. The takeover creates a company with about $50 billion (Dh183.5 billion) in annual sales, adding Cadbury's Creme Eggs and Trident gum to Kraft's Oreo cookies.

"We have increasing momentum in our business," Rosenfeld said in an interview yesterday. "We are quite confident that the combination of these two companies will help us to build on that momentum and further accelerate our ability to deliver attractive returns."

Cadbury's brands will "thrive" in the combined company, while for Kraft the deal gives leading positions in emerging markets from India to Brazil and Mexico, according to the statement.