Kraft gets conditional EU approval for Cadbury bid
Kraft has received conditional approval from European Union competition authorities for their planned takeover of Cadbury, and can now turn their attention to satisfying Cadbury shareholders – with a lot of convincing needed given they have so far only received acceptances for 1.52% of the confectioner’s stock.
“The decision is conditional upon the divestment of the Polish and Romanian chocolate confectionery businesses of Cadbury,” the EU advised. “In view of the remedies proposed, the Commission has concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.”
Competition Commissioner Neelie Kroes said that the remedies proposed by Kraft had satisfied authorities that the “proposed takeover would not adversely affect competition anywhere in Europe and that consumers would not be worse off”.
Kraft, through brands such as Milka, Côte d’Or and Toblerone, has a very strong presence in most Member States, with the exception of the UK and Ireland where customers’ preferences remain strong for traditional British chocolate. Cadbury is the market leader in the UK and Ireland, in particular with its brand Dairy Milk, while in continental Europe it is mainly active in France, Poland, Romania and Portugal, through local brands which it previously acquired.
To remedy competition concerns in Poland and Romania, Kraft has committed to divest Cadbury’s Polish confectionery business marketed under the Wedel brand and Cadbury’s domestic chocolate confectionery business in Romania.
Cadbury, which next week will issue their latest trading statement and a second response document, took the opportunity to again highlight their disapproval of the current Kraft offer.
“In response to the announcement of the EU Commission’s conditional approval of the proposed takeover of Cadbury by Kraft, the Board of Cadbury would like to reiterate its rejection of the Kraft offer as fundamentally undervaluing the company and its prospects and has recommended that shareholders do not accept the offer,” they advised in a statement. “We have great businesses and brands in Poland and Romania, and we are focused on getting a winning start to 2010.”
