Since Kraft made its opening bid of £10.2bn or 745p a share at the beginning of September, the two companies have exchanged blows in public.
On news of the initial offer, Cadbury CEO Roger Carr said Kraft operated “a low growth conglomerate business model” but today he said a revised bid offered “good value” for shareholders.
Cadbury has recommended that shareholders accept a new offer of 850p a share. Kraft will pay 840p for each Cadbury share and agree to pay a 10p per share dividend, in a deal with total value of £11.7bn.
For each Cadbury share, security holders will receive 500 pence in cash and 0.1874 new Kraft shares.
In a statement Cadbury head Roger Carr said: “We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world.”
Kraft Foods said the deal will provide the potential for meaningful cost savings and revenue synergies to the benefit of Cadbury shareholders.
But workers are less convinced that a Kraft-owned Cadbury will be in their interests. The Unite trade union has led a “Keep Cadbury independent” campaign in an effort to turn the US food giant away.
Unite claims that in the past 10 years, Kraft has sacked 60,000 workers to pay for the companies it has acquired. Cadbury workers will certainly be aware that Kraft closed the Terry’s factory in York two years after acquiring the chocolate orange specialists.
But Kraft insists that the deal will create opportunities for Cadbury workers. Kraft CEO Irene Rosenfeld added: “We have great respect for Cadbury’s brands, heritage and people. We believe they will thrive as part of Kraft Foods.”
Bringing Cadbury into Kraft will create a global chocolate business with 40 confectionery brands that generate combined annual sales of $100m.