Ferrero confirms it will not bid for Cadbury
Italian firm Ferrero, which makes Nutella chocolate spread and Ferrero Rocher chocolates, has declared itself out of the running for Cadbury.
Late last year it was reported that US-based Hershey Co in partnership with 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.
However, a formal offer was never made.
Today it has been confirmed that Ferrero has abandoned talks with Hershey and sources close to both companies have told Reuters that they will not be proceeding with a bid.
The announcement means Kraft has a better chance with its takeover offer.
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.
Last week, Kraft 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 is set to outline details of the new offer by 19 January.
However, British confectioner Cadbury, renowned for Dairy Milk chocolate, has been urging shareholders not to let Kraft “steal your company with its derisory offer“.
Cadbury chairman, Roger Carr, delivered the statement after it said it had enjoyed an “outstanding” performance in 2009, which exceeded market expectations.
Mr Carr criticised Kraft’s management and its track record of “overpromising and underdelivering” and said: “We do not need to be subsumed into a lumbering, corporate monolith to achieve our aims.”
Meanwhile, a briefing sent by the Unite union to all Cadbury shareholders is also warning against Kraft taking control of Cadbury and states that 7,000 jobs will be put at risk.
Jennie Formby, Unite’s national officer for food and drink, said: “Cadbury has clearly demonstrated its strength as a stand-alone company.
“Contrast that with Kraft’s excessive debt, under-performance and the unacceptable risks this brings for Cadbury and it is hard to see any wisdom in this bid whatsoever,” adds Formby.