Cadbury still not interested in Kraft bid

The Cadbury chocolate factory is pictured in Birmingham, central England. AFP PHOTO/PAUL ELLIS (Photo credit should read PAUL ELLIS/AFP/Getty Images)


Bill Radke: Kraft Foods submitted a new takeover offer this morning for the British goody maker Cadbury. This is not to the liking of a very influential Kraft shareholder. Billionaire Warren Buffett's company, Berkshire Hathaway, says it's voting against the deal. Also voting against the deal: Cadbury's executives. They basically told Kraft, "Yes, we know you have a lot of cash now, you just sold your Tombstone frozen pizza business to Nestle for billions of dollars, but we still don't like your offer." Marketplace's Christopher Werth picks up the story from London.

Christopher Werth: Kraft is expected to use the proceeds from this sale to increase its offer for the British chocolate maker, Cadbury, which currently stands at $17 billion.

Jon Cox is with Kepler Capital Markets. He says this is an indication of just how serious Kraft is.

Jon Cox: I think the tide is really changing in Kraft's favor. Now in the next couple of weeks, they can still increase their offer to get a deal done.

For Nestle, buying Kraft's U.S. pizza business could be a good move. The U.S. market is worth $37 billion a year. Nestle will get DiGiorno and Tombstone brands. Given the recession, analysts expect frozen pizza sales to stay hot, as more and more people opt for a quiet night in rather than going out or calling the delivery guy.

In London, I'm Christopher Werth for Marketplace.

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Eating pizza is not healthy but more and more people like to eat it,because it's convenient and dilicious.I think if pizza becomes healthier,more costumers will buy it.So not only brand and favor,but also better and healthier
ingredient are important

Dave, that's a good example.

Another one is Anheuser-Busch's aqcuisition of Rolling Rock, which I would argue was basically an attempt to buy into a market where they were unable to otherwise penetrate, effectively.

It would be interesting to look at Unilever's acquisition of Ben & Jerry's in this respect. I know there were special provisions to preserve the culture specified by the B&J board when Unilever took over...but not sure how much cache the brand still has.

Can any one out there name a merger where a giant congolmerate took over a smaller, niche business AND where the product that smaller business produced actually got better after the merger (or at least did not get worse?) I cannot. I am on Cadbury's side this time.

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