Kraft deal with Cadbury finalised

Cadbury sale

The deal between Cadbury and Kraft has finally been finalised after around six months. Now questions are being raised about job security.

Kraft said yesterday that it had secured 71.73 percent of Cadbury shares, which is enough to give it control of the company. The remaining shareholders are likely to sell their shares to Kraft, which can remove Cadbury from the stock market when it gains 75 percent of the company and buy the remaining shares once it owns 90 percent.

Irene Rosenfeld, chief executive and chairman of Kraft, said, "Together we have impressive global reach and an unrivalled portfolio of iconic brands, with tremendous growth potential. I warmly welcome Cadbury employees into the Kraft Foods family and look forward to meeting many of them in the days ahead. This combined company has a phenomenal future and I firmly believe it will deliver outstanding returns to our shareholders."

Once Cadbury is absorbed into Kraft, the group will have annual revenues of around US$50 billion, making it the world's largest chocolate and confectionery company and the second-largest food company.

Job security

Lord Mandelson, the Business Secretary, met Ms. Rosenfeld yesterday to discuss British jobs, where Ms. Rosenfeld assured Lord Mandelson that the takeover was good news for UK manufacturing than Cadbury's standalone chances.

The integration of Cadbury into Kraft and how many of the 4500 British Cadbury employees' jobs will be lost as a result of the merger was to be spoken about.

Though Kraft has not said how many jobs will go when it takes control, US$1.3 billion has been earmarked for restructuring costs, including redundancies. Kraft has said it will make cost savings of at least US$675 million a year within three years of taking over Cadbury, suggesting a big cut in jobs. Cadbury had started to move some of its production to Poland and unions are worried that the transfer will continue under Kraft.

There will also be the worry for those working for Kraft in America, as it's believed in some states in America, it will be cheaper to make staff redundant than it would be in the UK.

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Cadbury defends decision |Cadbury vs Kraft |Cadbury board recommends sale to Kraft |Cadbury sale agreed

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