Read more: http://www.reuters.com/article/idUSTRE60H1N020100119?type=globalMarketsNewsReuters wrote:Kraft Chief Executive Officer Irene Rosenfeld injected more cash into her bid and dropped the number of new shares in the offer to win over Cadbury Chairman Roger Carr and mollify billionaire investor Warren Buffett, the U.S. food company's top shareholder.
The deal would create the world's biggest confectioner, and analysts see little likelihood of a counterbid.
The cash-and-stock agreement, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 840 pence. Shareholders are also set to get a 10p special dividend, bringing it to a total of 850p.
It marks the largest European food and beverage deal on record, according to Thomson Reuters data.
Rosenfeld had prompted the talks by telephoning Carr on Sunday and suggesting a price of 830p. Although Carr insisted on 85Op, they met on Monday morning at the Lanesborough Hotel, Hyde Park, in central London, where she offered 840p.
Carr was firm and had his board's backing to insist on "850p or nothing" so advisers for both companies worked into the night to arrive at the agreed-upon deal.
"This is a bitter-sweet moment. As a chairman of a public company you are paid and required to focus on shareholder value and the process which we have undertaken has delivered shareholder value," Carr told BBC Radio regarding the end of independence for a British icon.
The final offer marked a 14 percent increase over Kraft's initial bid of 745p and about 11 percent above the value of the offer on Friday. The price tag is 50 percent above where Cadbury's stock was trading the day before Kraft's initial bid was disclosed in early September.
"Kraft has acquired a great asset at a great price and should be given credit for this," said Sanford C. Bernstein analyst Andrew Wood. "We consider that this is a bargain -- the lowest multiple of any major M&A deal in the global food space in well over a decade."
The combined company will just overtake privately owned Mars-Wrigley as the world's top sweet maker, bringing under one roof Cadbury's Dairy Milk chocolate and Trident gum and Kraft's Milka, Toblerone and Terry's chocolate brands.
Kraft sought Cadbury because of its strong growth in emerging markets, like India and Latin America. Kraft, famed for its Oreo cookies and Philadelphia cream cheese, derives over half its sales from the mature North American market.
Cadbury shares hit a record high of 838 pence in early trading and closed up 3.6 percent at 836.5p. Kraft was down 1.1 percent, to $29.25.
The thing about this is that Cadbury's also owns Trident Gum, Rowntrees Sweets and a few other companies, meaning that all of these have fused with a loads of other chocolate/sweet/gum brands.
This basically means that they hold a LOT of the stock and all the famous brands (Minus Hershey but only Americans like that...) basically this means they can charge more for it as people will still buy anyway, them charging more could either mean that other companies charge more or maybe even less to compete.
Basically the world of luxury sweets/chocolate/gum will completely change.
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