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| Kraft in £10.2bn move for Cadbury | Kraft in £10.2bn move for Cadbury |
| (about 1 hour later) | |
| US giant Kraft Foods has proposed buying UK confectionery firm Cadbury in a £10.2bn ($16.7bn) move. | US giant Kraft Foods has proposed buying UK confectionery firm Cadbury in a £10.2bn ($16.7bn) move. |
| Kraft said that the purchase of the maker of Dairy Milk would protect jobs in the UK - including saving a factory earmarked for closure. | Kraft said that the purchase of the maker of Dairy Milk would protect jobs in the UK - including saving a factory earmarked for closure. |
| The US firm added it wanted to create "a global powerhouse in snacks, confectionery and quick meals". | The US firm added it wanted to create "a global powerhouse in snacks, confectionery and quick meals". |
| Cadbury, whose shares leapt 36% on the news, said the approach "fundamentally undervalues" the company. | Cadbury, whose shares leapt 36% on the news, said the approach "fundamentally undervalues" the company. |
| As well as Dairy Milk, Cadbury also owns the Green & Black's chocolate brand and Halls lozenges, Trident and Dentyne gum brands, and liquorice allsorts maker Bassett's. It span off its drinks division as a separate business last year. | As well as Dairy Milk, Cadbury also owns the Green & Black's chocolate brand and Halls lozenges, Trident and Dentyne gum brands, and liquorice allsorts maker Bassett's. It span off its drinks division as a separate business last year. |
| It is seeing much of its growth in emerging markets such as India and Russia. | It is seeing much of its growth in emerging markets such as India and Russia. |
| And Cadbury said its "strong brands, unique category and geographic scope" left it confident of its future as a standalone firm | And Cadbury said its "strong brands, unique category and geographic scope" left it confident of its future as a standalone firm |
| Distribution savings | Distribution savings |
| CADBURY John Cadbury, a Quaker, opened shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming ten years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008 Check Cadbury shares | CADBURY John Cadbury, a Quaker, opened shop in Birmingham in 1824, selling tea, coffee and hot chocolate - as an alternative to alcohol Dairy Milk brand introduced in 1905, with Milk Tray coming ten years laterMerged with Schweppes drinks business in 1969. Its drinks arm was spun off in 2008 Check Cadbury shares |
| Kraft's brands include Kenco and Maxwell House coffee, Oreo biscuits, Jacobs, Terry's Chocolate Orange and Toblerone as well as cheese products such as Philadelphia and Dairylea. | Kraft's brands include Kenco and Maxwell House coffee, Oreo biscuits, Jacobs, Terry's Chocolate Orange and Toblerone as well as cheese products such as Philadelphia and Dairylea. |
| The proposed deal would allow up to $625m a year to be saved in distribution, marketing and product development costs, Kraft said. | The proposed deal would allow up to $625m a year to be saved in distribution, marketing and product development costs, Kraft said. |
| It added that Cadbury's brands were "highly complementary" to its portfolio and "would benefit from Kraft Foods' global scope and scale and array of proprietary technologies and processes". | It added that Cadbury's brands were "highly complementary" to its portfolio and "would benefit from Kraft Foods' global scope and scale and array of proprietary technologies and processes". |
| "As we have done, Cadbury has built wonderful brands by focusing on quality, innovation and marketing, but we believe the next stage in Cadbury's development will be challenging, given the increased importance of scale in the industry," said Kraft chairman Irene Rosenfeld. | "As we have done, Cadbury has built wonderful brands by focusing on quality, innovation and marketing, but we believe the next stage in Cadbury's development will be challenging, given the increased importance of scale in the industry," said Kraft chairman Irene Rosenfeld. |
| KRAFT FOODS Founded in Illinois as a cheese wholesaler in 1903Bought by Philip Morris in 1988, which also purchased Nabisco for $19.2bn in 2000 before integrating it into Kraft FoodsMore than 40 of its brands are more than 100 years oldHas 98,000 employees and 168 manufacturing and processing facilities worldwide | KRAFT FOODS Founded in Illinois as a cheese wholesaler in 1903Bought by Philip Morris in 1988, which also purchased Nabisco for $19.2bn in 2000 before integrating it into Kraft FoodsMore than 40 of its brands are more than 100 years oldHas 98,000 employees and 168 manufacturing and processing facilities worldwide |
| "We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation. We have great respect and admiration for Cadbury, its employees, its leadership and its proud heritage." | "We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation. We have great respect and admiration for Cadbury, its employees, its leadership and its proud heritage." |
| 'Iconic brands' | 'Iconic brands' |
| Industry analysts have been speculating that there could be consolidation in the food sector - with Evolution Securities saying that Nestle and Hershey's could come together to make a counter-bid for Cadbury's. | Industry analysts have been speculating that there could be consolidation in the food sector - with Evolution Securities saying that Nestle and Hershey's could come together to make a counter-bid for Cadbury's. |
| Kraft said its possible offer - based on paying 745 pence for every Cadbury's share - was a 31% premium to its closing price last week and 42% more than the firm's shares were worth in early July, when speculation about possible deals in the sector intensified. | Kraft said its possible offer - based on paying 745 pence for every Cadbury's share - was a 31% premium to its closing price last week and 42% more than the firm's shares were worth in early July, when speculation about possible deals in the sector intensified. |
| In a letter to Cadbury's, Ms Rosenfeld said it would be able to continue to operate its Somerdale factory in Keynsham, near Bristol, which is set to be closed, and also invest in its plant in Bournville, Birmingham, "thereby preserving UK manufacturing jobs". | In a letter to Cadbury's, Ms Rosenfeld said it would be able to continue to operate its Somerdale factory in Keynsham, near Bristol, which is set to be closed, and also invest in its plant in Bournville, Birmingham, "thereby preserving UK manufacturing jobs". |
| Last year Cadbury announced plans to slash 15% of its workforce and factory numbers worldwide - equivalent to 7,800 jobs - as it looked to cut costs. | Last year Cadbury announced plans to slash 15% of its workforce and factory numbers worldwide - equivalent to 7,800 jobs - as it looked to cut costs. |
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