Kraft increases offer for Cadbury as Nestlé withdraws bid
Swiss food giant Nestlé has declared itself out of the running for British confectioner Cadbury.
Late last year, Nestlé was reported to be the latest company to make an offer for Cadbury after US food giant, Kraft, which is renowned for brands such as Kenco coffee and Oreo biscuits, approached Cadbury in September with an informal £10.2 billion takeover offer, which Cadbury rejected.
In November, Kraft made a second bid of £9.8 billion, which was again swiftly rejected.
Kraft has now increased its offer for Cadbury having sold its North American pizza business to Nestlé for $3.7 billion.
As a result of the sale, Kraft said it will use the funds to offer an extra 60p per share in cash to appeal to Cadbury shareholders. Kraft will outline details of the new offer by 19 January.
Kraft said it “continues to believe that its share price is depressed as a consequence of a number of short-term factors which it believes will dissipate once the uncertainty surrounding its offer for Cadbury is resolved.”
However, late last year it was reported that US-based Hershey Co, in partnership with Italy’s confectionery group Ferrero, were considering a bid for Cadbury.
Hershey is the largest chocolate maker in the US and is controlled by the charitable Hershey Trust. It makes the well-known Hershey bar and Hershey’s Kisses.
Ferrero, which makes Nutella chocolate spread and Ferrero Rocher chocolates, has a workforce of more than 21,600 and has annual sales of €6.2 billion.
Cadbury recently confirmed that it has been in talks with Hershey over a possible deal.
Roger Carr, Cadbury’s chairman, was recently reported as saying: “Clearly, while some potential offers are more aligned with our business model than others, it is the value of the offer rather than the source that is our priority.”