Kraft Sets Sights on Cadbury
Kraft Foods Inc. has made a proposal to the Board of Cadbury plc to combine the two companies. The Board of Cadbury has since rejected this proposal, citing its confidence in Cadbury's standalone strategy and growth prospects as a result of its strong brands, unique category and geographic scope and the continued successful delivery of its Vision into Action plan.
The Board believes that the proposal fundamentally undervalues the group and its prospects.
However, Kraft Foods is committed to working toward a recommended transaction and to maintaining a constructive dialogue and is announcing the proposal as a means to encourage and further that process.
If a proposal should be accepted by Cadbury, the combination would build on Kraft Foods' position as a global powerhouse in snacks, confectionery and quick meals with a rich portfolio of iconic brands.
According to Kraft Foods, the transaction would create:
- A company with approximately $50 billion in revenues;
- A geographically diversified combined business, with leading positions and significant scale in key developing markets including India, Mexico, Brazil, China and Russia;
- A strong presence in instant consumption channels in both developed and developing markets, expanding the reach and margin potential of the combined business; and
- The potential for meaningful revenue synergies over time from investments in distribution, marketing and product development.
Commenting on the proposed transaction, Irene B. Rosenfeld, Chairman and CEO of Kraft Foods, says: "This proposed combination is about growth. We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation... Our current plans contemplate that the UK would be a net beneficiary in terms of jobs. For example, we believe we would be in a position to continue to operate the Somerdale facility, which is currently planned to be closed, and to invest in Bournville, thereby preserving UK manufacturing jobs."
The Board believes that the proposal fundamentally undervalues the group and its prospects.
However, Kraft Foods is committed to working toward a recommended transaction and to maintaining a constructive dialogue and is announcing the proposal as a means to encourage and further that process.
If a proposal should be accepted by Cadbury, the combination would build on Kraft Foods' position as a global powerhouse in snacks, confectionery and quick meals with a rich portfolio of iconic brands.
According to Kraft Foods, the transaction would create:
- A company with approximately $50 billion in revenues;
- A geographically diversified combined business, with leading positions and significant scale in key developing markets including India, Mexico, Brazil, China and Russia;
- A strong presence in instant consumption channels in both developed and developing markets, expanding the reach and margin potential of the combined business; and
- The potential for meaningful revenue synergies over time from investments in distribution, marketing and product development.
Commenting on the proposed transaction, Irene B. Rosenfeld, Chairman and CEO of Kraft Foods, says: "This proposed combination is about growth. We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation... Our current plans contemplate that the UK would be a net beneficiary in terms of jobs. For example, we believe we would be in a position to continue to operate the Somerdale facility, which is currently planned to be closed, and to invest in Bournville, thereby preserving UK manufacturing jobs."