Kraft and Cadbury Reach Deal

Kraft Foods and Cadbury reached a deal for Kraft to acquire Cadbury for £8.40 per share, which valued Cadbury at £11.5 billion (approximately US$18.9 billion). This acquisition was significant in the global confectionery market, as it aimed to create a leading entity in the industry. To finance this takeover, Kraft Foods had to borrow £7 billion (around US$11.5 billion), indicating the scale of the investment involved. The acquisition raised concerns among various stakeholders, including UK Business Secretary Peter Mandelson, who cautioned Kraft against exploiting the acquisition for short-term financial gain. The merger was seen as a strategic move to enhance Kraft's portfolio and expand its market presence, particularly in the chocolate segment, where Cadbury held a strong position. The deal was part of a broader trend of consolidation in the food and beverage sector, where companies sought to increase their competitive edge through mergers and acquisitions. The impact of this acquisition was felt across the industry, influencing market dynamics and prompting other companies to reassess their strategies in response to the newly formed global confectionery leader.