Kraft set to take over Cadbury

LONDON, ENGLAND—The board of Cadbury PLC has unanimously endorsed a cash and share trade bid by Kraft to purchase Cadbury and form the largest confectionery company in the world.

British-based Cadbury’s directors gave their blessing to the deal after Kraft raised an earlier bid from $17.1 billion US to $$19.5 billion, with a higher percentage of cash and lower proportion of payment in Kraft shares to Cadbury shareholders.

Kraft, which is based in Northfield, IL, is awaiting the response of Cadbury shareholders who had until Feb. 2 for a majority of them to accept the deal.

With the lowering of the share portion of its offer, Kraft eliminated the need to have the deal approved by its own shareholders.

Cadbury brands include Dairy Milk chocolate and Trident gum, while Kraft’s include Milka, Toblerone and Terry’s chocolate products.

Analysts say that a takeover of Cadbury would help Kraft grow in countries such as India, South Africa and Mexico.

Kraft also expects to net $625 million in annual pretax cost savings with the merger, which the American company says would form a corporation with yearly revenues of $50 billion US.