Hershey and Ferrero join forces for Cadbury

Will Hershey join with Ferrero?

Cadbury's is again in the spotlight due to a prospective takeover bid, and this time it's not Kraft. The American chocolate giant Hershey and the Italian confectionery firm Ferrero have confirmed that they are considering a joint bid for Cadbury.

There has been speculation indicating that the two companies would join forces in its own bid to take over Cadbury following the rejection from the company of Kraft's hostile GBP£9.8 billion offer.

In a statement to the Stock Exchange, Hershey said it was "reviewing its options."

While a statement from Ferrero stated that "Ferrero confirms it is in the preliminary stages of evaluating its options in respect of Cadbury's."

Neither statement from Hershey or Ferrero referred to the other company. The Wall Street Journal, citing people it didn't identify, yesterday said Hershey has been in talks with Ferrero for weeks about making a joint bid for Cadbury. Any approach would rival Kraft's unsolicited offer, Bloomberg state.

Kraft

The Kraft offer had been made straight to Cadbury investors after its initial approach was rejected by the board in September.

Cadbury labelled the Kraft bid "derisory", with chairman Roger Carr adding that it did not come "remotely close to reflecting the true value of the company," Sky News stated.

Kraft responded by insisting the offer was "fair and attractive" but the intervention will put pressure on it to improve its offer.

Kraft said its merger plans offered "the best immediate and long-term value" for Cadbury - and played up the fact that no other business had publicly showed any interest in the firm.

The American company wants a tie-up with Cadbury to form a "global powerhouse" which would become the number one chocolate and sweets player and a "strong number two" in chewing gum with the addition of Cadbury's Trident brand.

Yet, Kraft also warned it would remain "financially disciplined" over its approach after its largest shareholder - billionaire investor Warren Buffett - warned the company against overpaying for Cadbury.

History

Cadbury began life as a grocer's shop in Birmingham in 1824. Its Dairy Milk is the UK's top-selling chocolate bar and more than 250 million are sold every year in 33 countries.

Ferrero, which has annual sales of 6.2 billion euros (GBP£5.4 billion), 18 factories and more than 21,600 employees worldwide, is also known for its Kinder chocolates and Tic-Tac sweets.

Hershey is controlled by a charitable trust that owns about 31 percent of Hershey and 80 percent of its voting shares. While Ferrero, based in Pino Torinese, Italy, is privately held.

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Sales boost for Cadbury |Is Kraft set to make a new bid? |Cadbury attacks Kraft

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