Feeds

Cadbury flakes in face of Kraft bid - cuts expected

Despite a Wispa in shareholders' ears from Mandy

Remote control for virtualized desktops

Cadbury, the 186-year old chocolate maker, has given up the fight and accepted a hostile takeover bid from Kraft.

The two firms are still locked in final negotiations - an update given to the London Stock Exchange said they were finalising terms and that a further announcement will be issued shortly.

The offer is for 840p per share, a decent increase on Kraft's initial offer of 761p, the BBC reports. This offer values Cadbury at £11.7bn.

Kraft flogged off its North American pizza business to Nestle in early January for $3.7bn to help fund the bid for Cadbury. Despite this, the new firm will be laden with an estimated $22bn in debt and will be looking for job cuts and other cost cutting.

Unions fear the debt-burden state will push management into aggressive job cuts. Union Unite warned that Kraft cut 19,000 jobs between 2004 and 2008. It fears 7,000 direct jobs and 20,000 jobs at suppliers are at risk. IBM recently won an outsourcing contract for Kraft's HR processing.

The board accepted the deal in the face of pressure from major shareholders and hedge funds.

Cadbury employs 6,000 people in the UK and about 46,000 worldwide. The original business was a hot chocolate shop in 1824 in Birmingham's Bull Street.

Lord Mandelson held a meeting last week with major Cadbury investors to try and keep the Crunchie and Creme Egg maker in British hands. He apparently warned shareholders that he expected long-term commitments, not just short-term profit taking. We wish him luck with that.

But there are limits to what Mandy can do - after all, it's a chocolate maker, not a bankrupt bank which needs bailing out.

Kraft claims nine brands with revenues of over $1bn a year and 50 brands which bring in more than $100m a year. These include Maxwell House, Philadelphia cheese, Oreos and Milka chocolate. ®

Beginner's guide to SSL certificates

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?