Cadbury accepts Kraft's sweetened bid
A bar of Cadbury's Dairy Milk chocolate.
TEXT OF INTERVIEW
Steve Chiotakis: Looks like there's a bright light at the end of this cheese-chocolate tunnel. Today the board of British candy maker Cadbury accepted an improved offer from American food giant Kraft. It's a deal valued at more than $19 billion. Let's check in with Marketplace European Correspondent Stephen Beard, he's with us live from London.
Stephen Beard: Hello, Steve.
Chiotakis: So Cadbury had opposed this deal from the beginning. Why the change of heart right now?
Beard: Kraft made them an offer that they in the end couldn't refuse. The final bid values Cadbury at around $19.5 billion. That's a good $3 billion more than Kraft originally offered.
Chiotakis: And what's the reaction to this news?
Beard: From investors? Well one big institutional shareholder in Cadbury said, a little grudgingly this morning, "We'll probably go along with this. We were hoping for more, but looks like the best we're going to get." The union, however, representing most of the Cadbury workers, is still voicing its bitter opposition. Kraft is going to have to take on a lot of debt to do this deal -- $11.5 billion. And the union fears there's going to have to be some savage cost-cutting and job losses at Cadbury as a result.
Chiotakis: Mmm. And how's it playing out more broadly in Britain, Stephen? I mean what are people there saying?
Beard: Well you know Steve, the U.K. is one of the most open economies in the world. Foreign takeovers don't usually cause anything like the hostility here that they do in other countries. But this takeover is different, it's caused a lot of disquiet. It's a cultural thing -- there's been a widespread feeling that a venerable British company with great social values and superior products is falling into the clutches of a giant, soulless U.S. corporation that makes processed cheese.
Chiotakis: All right, Stephen Beard joining us from London. Stephen, thank you.
Beard: OK, Steve.