8/8/2019 Cadbury Shareholders Approve Kraft Takeover

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Cadbury shareholders approve Krafttakeover

ReutersPosted: Wednesday, Feb 03, 2010 at 1020 hrs ISTUpdated: Wednesday, Feb 03, 2010 at 1020 hrs IST

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London: Kraft Foods won control of Cadbury on Tuesday as holders ofalmost 72 per cent of the British chocolatier's stock accepted the 11.7 billion poundtakeover that will create the world's biggest confectioner.

Kraft needed just 50 per cent plus one share to take control of Cadbury. Chief ExecutiveIrene Rosenfeld expects to complete the deal in the coming weeks as remaining Cadburyshareholders come forward to accept the cash and stock bid.

"We are confident that, given the strong support that we got in the tender, in the comingdays and weeks we will be able to finish the process," Rosenfeld said in a telephoneinterview from London on Tuesday as she munched on a Cadbury's Dairy Milk chocolatebar.

The majority approval caps a five-month battle for Cadbury that tested Rosenfeld'sleadership and drew harsh words from Cadbury's top brass in the confectioner's defense.

Rosenfeld is taking the next steps toward integrating the world's No. 2 confectioner intothe second-largest food maker. She met on Tuesday with UK Business Secretary PeterMandelson, who wants to protect about 4,500 British Cadbury jobs.

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8/8/2019 Cadbury Shareholders Approve Kraft Takeover

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Kraft promised $675 million of annual cost savings from the deal, which means some ofCadbury's 45,000 workers around the world will lose their jobs, analysts said.

Rosenfeld did not make promises about specific jobs, instead telling Reuters that the dealis meant to increase sales of Cadbury and Kraft products.

"The discussion of the UK job situation has been very exaggerated," Rosenfeld said. "Weactually expect this will be a net positive for the UK."

Cadbury's leaders will leave; Chairman Roger Carr and the board will go after certifyingCadbury's 2009 results.

Cadbury CEO Todd Stitzer and Chief Financial Officer Andrew Bonfield will help Kraftintegrate Cadbury into the Northfield, Illinois-based food maker, but will step out of thedirect chain of command, Rosenfeld said.

Cadbury's workers gathered in central London as the votes were counted to urge thegovernment to protect Cadbury's British workforce and future investment at its Britishsites as they join with Kraft's 98,000 global staff.

Kraft shares rose 1.6 per cent. Cadbury closed up 1 per cent at 840 pence.

DAIRY MILK, AND MILKA

The Kraft-Cadbury combination brings together Cadbury's Dairy Milk chocolate, Hallscough drops and Trident gum with Kraft's portfolio of Milka and Toblerone chocolates,Oreo cookies, Maxwell House coffee and Philadelphia cream cheese.

Once Kraft gains 75 per cent of Cadbury's shares, it can delist them. At more than 90 percent,... it can force remaining Cadbury shareholders to sell.

The London Stock Exchange said it expects Cadbury to be delisted by the start of tradingon February 8. Kraft said its final offer would remain open until further notice.

Cadbury's annual sales are only one-fifth of Kraft's, but the British group will contributeto growth in a combined company with more than $50 billion in sales. Kraft will still bethe No. 2 food group after Nestle but will edge past Mars Inc to be the world's topconfectioner.

Kraft struck a deal to buy Cadbury on January 19 in an offer that valued Cadbury sharesat 840 pence each, with 60 per cent of the price coming as cash and the rest in new Kraftshares. With a fall in Kraft shares, the value of the bid is around 830p a Cadbury share.

Moody's Investors Service on Tuesday said it is no longer reviewing Kraft's ratings fordowngrade, saying the company was likely to restore any damage to its credit profile

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from the acquisition. But it gave Kraft a negative outlook, saying the company needed tocommit to reducing debt.

Last month, potential Cadbury suitors such as Hershey, Italy's Ferrero and Nestle ruledout bids. Hershey reported a higher-than-expected quarterly profit on Tuesday and

defended its decision to back away from bidding on Cadbury.

Hershey could lose a license to sell Cadbury products in the United States if Kraftdecides to bring production of those products in house after current agreements expire.Rosenfeld said it was too early to speculate about such actions...