Cadbury continues to rebuff Kraft offer

The European Commission has announced it has cleared the proposed acquisition of Cadbury PLC of the UK by Kraft Foods Inc. of the US under the EU Merger Regulation by way of public offer.

The decision is conditional upon the divestment of the Polish and Romanian chocolate confectionery businesses owned by Cadbury.

In view of the remedies proposed, the Commission concluded that the operation would not significantly impede effective competition in the European Economic Area or any substantial part of it.

Cadbury’s response to last week’s announcement was one of hostility. The Board of Cadbury reiterated its rejection of the Kraft offer as fundamentally undervaluing the company and its prospects and has recommended that its shareholders do not accept the offer.

“We have great businesses and brands in Poland and Romania, and we are focused on getting a winning start to 2010,” the company stated.

Despite Cadbury’s flat refusal Kraft Foods extended its offer until 2 February 2010.

These events follow on from Kraft Foods’ initial announcement on 9 November last year of its intention to acquire the whole of the issued and to be issued share capital of Cadbury PLC.

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