Kraft completes Cadbury takeover

THE takeover of confectionary giant Cadbury by US rival Kraft Foods has been agreed after almost 72% of the chocolate maker’s shareholders backed the £11.5bn bid.

The move, announced late yesterday, gives the Chicago-based company control of what was the world’s largest publicly traded confectionary maker.

Kraft, which had previously entered the British confectionary market when it took over Terrys, has said the move will be good for the long term prospects of Cadbury and offered better opportunities than if the Bournville manufacturer remained a standalone company.

However, it appeared to be a case of mixed messages last night when a meeting between Kraft chief executive Irene Rosenfeld and Business Secretary Lord Mandelson failed to resolve log term job security issues for the staff at Bournville and the company’s other sites.

Analysts have said that Kraft could possibly make synergy savings of around £422m following the takeover and after taking on massive loans in order to finance the deal, the company will be looking to get value for money as quickly as possible.

Despite Kraft assurances that it will invest in UK manufacturing and keep the Somerdale plant at Bristol open, unions and workers believe any savings will be financed by job cuts and plant closures.

A delegation of around 100 workers from Cadbury travelled to Westminster yesterday in an eleventh hour bid to persuade shareholders to reject the deal.

However, it was too late and shortly before 5pm details of the takeover were released.

Mrs Rosenfeld released a statement welcoming Cadbury to the Kraft family but workers at the Bournville plant said today they had yet to receive any word from management about what would be happening.

Jerry Blackett, chief executive of Birmingham Chamber of Commerce, said workers had to be realistic and recognise that no company in today’s economy could give any long term assurances about jobs and factories.

He stressed that everyone should view the positives of the deal and look to move forward.

The task facing Kraft is a major one. Integration of such a large company will be a major challenge but commentators in the US say that plans are already advanced.

Within the next six weeks Kraft is expected to name the senior regional managers for the combined companies. However, how that will be structured is as yet, unclear.

With locations spread across Europe and the Middle East, Kraft has a completely different structure to Cadbury so some kind of compromise will have to be reached.

This could spell problems for the firm’s administrative base in Uxbridge, which is where most jobs are likely to be at immediate risk.

Cadbury Chairman Roger Carr will resign shortly, while chief executive Todd Stitzer and chief financial officer Andrew Bonfield will stay on board to assist with the transition but what happens after that remains to be seen.

Heading Kraft’s integration team will be Tim Cofer, who until last month had been president of its fast-growing frozen pizza business. The operation was sold to Nestle in an attempt to raise funds for the Cadbury bid.