The UK’s most famous confectioner Cadbury has rejected a £10.2bn takeover bid from Kraft Foods that the Oreo and Dairylea-owner said would create “a global powerhouse in snacks, confectionery and quick meals” In a statement to the stock market this morning, however, the US food giant appealed directly to shareholders, saying it is “committed to working toward a recommended transaction and to maintaining a constructive dialogue and is announcing this proposal as a means to encourage and further that process”.
US confectionery group The Hershey Company has appointed JPMorgan to advise on its options as it weighs up a bid for Cadbury in the aftermath of Kraft’s £10.2bn offer. The Times has reported that Hershey’s could partner with Nestle, the Swiss multinational, in any counterbid. The move came as Irene Rosenfeld, Kraft’s chairman and chief executive, rebuffed claims Kraft could be forced into overpaying.
Should Kraft Foods’ takeover play for Cadbury eventually succeed, it would create a $51 billion package-food and confectionary company and a $2.7 billion global advertiser. Advertising Age estimates that the two companies would spend about $1.5 billion in the U.S. alone, including both measured and unmeasured channels. According to TNS Media Intelligence, Kraft spent $837 million in measured media during 2008 to Cadbury’s $138 million. While Cadbury may be best known in the U.S. for its Easter-time cream eggs, in actuality the company spends the majority of its budget on gum brands including Trident, Dentyne and Stride. Rounding out the company’s top five U.S. brands by ad spending are Hall’s cough drops and Green & Blacks premium chocolate bars.