20 January 2010 | Jake Kanter
US giant Kraft Foods has agreed to a £11.9 billion buy-out of UK confectionery firm Cadbury.
After months of wrangling, Cadbury’s resolve finally melted yesterday and the company’s board called on shareholders to accept Kraft’s latest offer during a vote on 2 February.
The US firm said the merger would lead to pre-tax savings of at least $675 million (£414 million) a year. Procurement will be expected to make a significant contribution by wielding greater spending power, while administrative reductions and marketing and selling cuts will generate further savings.
Meanwhile, Cadbury chairman Roger Carr told the BBC that job cuts at the company’s headquarters were an “inevitability”. A spokeswoman told SM it was too early to say whether buyers were at risk.
Kraft, whose brands include Milka and Toblerone, said the takeover would create a “global confectionery leader”. But the move has attracted criticism. Trade union Unite said the loss of Cadbury’s independence was a “sad day for UK manufacturing”.
“Short-term City interests and institutional shareholders have dictated this process from the outset with little thought to the impact this sale will have on jobs, the supply chain or Cadbury's future,” said national officer for food and drink Jennie Formby.