US food giant Kraft is buying Cadbury for £11.5bn after Cadbury’s board approved a new increased bid for the confectionery business.
The Cadbury board has recommended shareholders accept Kraft’s new offer of 840p a share, which values the company at £11.5bn ($18.9bn).They have until 2 February to back the deal.
Kraft said the takeover would create a “global confectionery leader”.
“We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world,” said Cadbury’s chairman Roger Carr.
“We will now work with the Kraft Foods’ management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees.”
Irene Rosenfeld, the chairman and chief executive of Kraft Foods, said the deal was good news for shareholders and staff.
“We have great respect for Cadbury’s brands, heritage and people,” she said. “We believe they will thrive as part of Kraft Foods.”
The deal is a significant improvement on previous Kraft offers, which were termed “derisory” by the Cadbury board.
But there are fears of possible job cuts at Cadbury’s UK operations, as a result of the merger.
The trade union Unite claims Kraft’s increased debt – Kraft will borrow £7bn ($11.5bn) to finance the deal – will result in job losses.
Cadbury employs more than 6,000 staff in the UK and 46,500 globally.