Kraft, Cadbury Ink $19.5 Billion Deal

LONDON Kraft Foods, Inc. announced preliminary approval of its $19.5 billion purchase bid for Cadbury. If approved by shareholders, the sweet deal would combine the two confectionary companies into the No. 1 biggest candy companies in the world.

The deal, comprising 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, is a 9-percent premium to its previous 770 pence offer and 50-percent higher than Cadbury's market value before Northfield, Ill.-based Kraft announced its takeover bid last fall.

As reported by Forbes, the Kraft-Cadbury combination will create a portfolio with more than 40 confectionary brands, each with annual sales in excess of $100 million. Kraft Foods Chairman and 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. We believe they will thrive as part of Kraft Foods. This recommended offer represents a compelling opportunity for Cadbury Shareholders, providing both immediate value certainty and upside potential in the combined company. For Kraft Foods shareholders it transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline," said Irene Rosenfeld, chairman and CEO of Kraft Foods.

Commenting on the offer, Roger Carr, chairman of Cadbury, said: "We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made 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."