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Friday 11th of September 2009
September 8, 2009    

Kraft shares fall over Cadbury offer

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by Kay Murchie
Kraft shares fall over Cadbury offer

US food giant Kraft saw its shares fall 5% to $26.7 this morning on Wall Street as investors expressed concern about the group’s takeover approach for British confectionery giant Cadbury.

Cadbury rejected the £10.2 billion offer from Kraft, which is renowned for brands such as Kenco coffee, Oreo biscuits, Terry’s Chocolate Orange, Toblerone and cheese products such as Philadelphia and Dairylea.

When the news of the takeover approach emerged, shares in Cadbury, the maker of Dairy Milk chocolate, surged 36% to 778p. Furthermore, today Cadbury rose to an 11-month high amid expectations a rival bidder could emerge or that Kraft will improve its terms.

According to the US food group, a combination of the two firms would create a “global powerhouse” in food and confectionery, with annual sales of around US$50 billion (£30.5 billion).

Michael Osanloo, executive vice president of Strategy at Kraft, emphasised: “We are the most logical buyer but we will remain financially disciplined.”

In related news today, T-Mobile UK and Orange have merged to create the UK’s largest mobile phone company with more than 28 million customers and annual sales of €9.4 billion (£8.2 billion).

The combined company will have a 37% share of the UK mobile market - overtaking market leader, Telefonica’s O2.

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