Kraft's Takeover of Cadbury
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Case Code: BSTR388 Case Length: 24 Pages Period: 2008-2010 Pub Date: 2011 Teaching Note: Not Available |
Price: Rs.500 Organization: Cadbury Plc, Kraft Foods Inc Industry: Consumer Packaged Goods Countries: UK, US, Global Themes: Merger and Acquisition, Takeover, International Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The case discusses the takeover of UK-based Cadbury Plc (Cadbury) by US food maker Kraft Foods Inc. (Kraft). In February 2010, Cadbury accepted Kraft's £ 11.9 billion (US$19.7 billion) takeover offer after a battle that lasted more than 100 days. Earlier in 2009, the British chocolate maker rejected a £9.8-billion (US$ 16.4 billion) hostile takeover bid from Kraft saying that the bid did not reflect the true value of the Cadbury brand. The case explores the circumstances that led to Cadbury accepting Kraft's offer and provides a detailed account of the deal. According to industry experts, globally, the combined group would be number one in the chocolate and confectionery segments and number two in the high growth gum segment.
The case describes the substantial benefits of the deal to both Kraft and Cadbury. The deal is expected to provide revenue synergies to Kraft over time from investments in distribution, marketing, and product development.
Issues
The case is structured to achieve the following teaching objectives
- Understand the issues and challenges in Mergers and Acquisitions, particularly those involving a hostile takeover
- Analyze the pros and cons of transcontinental and cross-cultural takeovers
- Evaluate the Cadbury takeover and its potential synergies
- Study the benefits to Kraft and Cadbury from the takeover deal
- Analyze the future challenges of the takeover and how these can be overcome
Contents
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American Food Major Takes Over British Icon
Background Note
The Bidding War
The Final Deal
The Rationale
Emotions Run High
The Aftermath
The Road Ahead
Exhibits
Keywords
Merger and Acquisitions, Takeover, Hostile takeover, International Business,International Management, Cross-border takeover, Synergies, Post-merger Integration, Distribution, Marketing, Product development, Consumer packaged goods, Cadburys, Kraft
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