Cadbury Wants More Money In Kraft Deal
Leaders of Cadbury plc (Public, LON:CBRY) plan on defending against the $16.7 billion offer from Kraft Foods Inc. (Public, NYSE:KFT) . The reason, simply, is they think their company is worth more money. Cadbury is the owner of a number of iconic brands which sell well in many parts of the world.
For Kraft the merger would make them the world's leading confectionary company.
Kraft offered a 31% premium above the prior day's share price.
"It's a jewel. And it has a global footprint that people will die for," said a source close to the company. Cadbury is strong in former colonial markets such as Australia and India. Kraft is no stranger to household brand names, either. They market such products as Terry's, Milka, Cote d'Or and Toblerone chocolates; Oreo, Ritz and LU biscuits; Kenco, Maxwell House, Carte Noire and Jacobs coffees; and Dairylea and Philadelphia cheeses worldwide.
Together a combined Cadbury and Kraft would represent a $50 billion juggernaut that has true global reach. The combined company would be particularly well suited for competition in the developing world of India, Brazil, China, and Russia.
It's widely expected that Kraft will sweeten its offer to obtain Cabdury. Kraft CEO Irene Rosenfeld seems determined to acquire the British company.
"It's a portfolio of beloved iconic brands with a very strong heritage," she said.
Although Kraft was looking for a friendly takeover, a hostile one hasn't been ruled out just yet.
A 15% share of the worldwide confectionary market is at stake, so emotions could very well run high before this deal is finished.
Courtesy: money-in-kraft-deal/">WSE
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