FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Congratulations! With no intruder, Kraft doesnt feel compelled to revise its offer. Necessary cookies are absolutely essential for the website to function properly. It was founded in 1824 by John Cadbury who opened a grocery shop in Birmingham, England. The case of the Kraft Cadbury takeover shows that Cadbury's shareholders were not necessarily the long term traditional owners of the target company stock. Clearly the introduction of these amendments won't prevent . Keep abreast of significant corporate, financial and political developments around the world. Earlier in 2009, the British chocolate maker rejected a GBP9.8-billion (USD16.4 billion) hostile . Ensuring fair and transparent of the personnel selection process is of vital importance. In January 2010, Kraft Foods made its final offer to buy Cadbury for around 11.9 billion which included an increased offer to 840 pence per share plus a special 10 pence per share dividend. There must be some world-shaking changes for these two companies. ThePanel of Takeovers and Mergers, which regulates this area reviewed the laws and in September 2011 changes were made to the Takeover Code. A disadvantage for Krafts shareholders of the takeover is that they now mentally feel less financially strong as assets were being sold and the entire pizza production plant worth $3.7 billion was sold to raise money for the takeover. The Kraft Cadbury takeover had advantages and disadvantages for both companies. This category only includes cookies that ensures basic functionalities and security features of the website. Kraft Foods has become a global leader in concentrated powdered soft drinks with Tang. Upload unlimited documents and save them online. Therefore, it is recommended that the code be revised as follows: After completion of the acquisition, the Kraft Group reorganized and formed Mondelez International and Kraft Corporation. Advantages of the Takeover. A combination of Kraft products like Toblerone, Oreos and Ritz crackers with Trident gum and Dairy Milk chocolates from Cadbury would result in $625 million annual pretax cost savings on annual company costs of research and development, advertising, branding and procurement. It is very likely caused by the strengthening of dominant market power and monopoly,itmainly displays inimproving the product price,preventing new firms to enter,expelling competitors.Kraft is the second largest food company in the world,while Cadbury is the second largest candy maker in the world. A combined Kraft and Cadbury would significantly expand the global reach of both businesses and create synergies worth in the region of $625m. Kraft hopes to acquire Cadbury to expand its global influence, especially in the snack category from emerging markets such as India. This page of the essay has 1,488 words. Since 2011, offer documents must contain additional information on the offerors bid financing and any facilities which will be used to refinance the offerees existing indebtedness, including repayment terms, interest rates, maturity dates and key covenants, and the relevant debt documents must be put on display. Any excess of actual fees over 10% of estimated needs to be additionally disclosed. Content verified by subject matter experts, Free StudySmarter App with over 20 million students. There many challenges faced along with the restructuring of the deal post the takeover. Former chairman of Citigroup Sandy Weill said: Make a decision faster than usual,and not slowthis will help you seize the excellent talents,and convey the right information to every employee.(Claman,2011). It would expand the global reach of both Cadbury and Kraft and create highly worthwhile synergies. This proves that it is the low level managers and employees who feel the vulnerability of such an action. Synergy is the idea that the combined performance and value of two companies is higher than that of the two companies individually. These are primarily high debt issues and employee layoffs. Lastly, the UK's business secretary, Lord Mandelson, declared that any buyer who failed to respect the historic confectioner would be opposed by the government. Prohibition on certain deal protection measures, Intention statements regarding business and employees. You can still enjoy your subscription until the end of your current billing period. Taking Mars and Wrigley for example,Mars spent $23 billion to buy Wrigley,which is a famous chewing gum maker, itget a full global network and a healthy image of the businessquickly. However, Cadbury did not sell, posing a major challenge to Krafts search for Cadbury. Moreover, Craft took over Cadburyis a threat to small businesses.Therefore, the title can be Kraft took over Cadburya Sweet sorrow, which cansummarize the pros and cons. What happened in the Kraft : Cadbury takeover? Kraft Foods made its final offer to buy Cadbury for around 11.9 billion which included an increased offer to 840 pence per share plus a special 10 pence per share dividend. The Kraft accquisiton of Cadbury caused some controversey back in the early 2010's, and the companies impact is continuing to be felt. Stitzer and his management team aimed at the global domination in the Confectionery world, while the stakeholders were much worried about the financial performance. Was Cadbury for sale when Kraft launched the hostile bid? This article discusses the Kraft Cadbury takeover and highlights the amendments introduced in 2011 in the wake of the takeover. Tourists are back. The offer was not reflective of Cadburys strong brand name across the nations and its extensive consumer base. This resulted in Kraft incorporating a cost-cutting approach and thereby having a direct impact on employees, their jobs, and their monthly wages. Compare Standard and Premium Digital here. The acquisition made headlines in the industry and raised serious questions about the British takeover law. Was Stalin successful at dealing with opposition? On January 18, Kraft finally managed to take over one of the worlds second largest confectionery manufacturer in a hostile bid of an enormous 11.5billion (US$19.5billion). August 5, 2011: Kraft will split into two companies Kraft planned to split the food giant only 18 months after the controversial acquisition of British chocolate maker Cadbury. Many in the world of mergers and acquisitions felt that it had become too easy for foreign firms to buy UK rivals and the process had become a little murky. The Kraft - Cadbury Takeover and the Glencore-Xstrata Merger - 1999 In 2015, Kraft Food Groups merged with Heinz to become the 5th largestfood and beveragecompany in the world. How was the Kraft : Cadbury deal restructured? For Kraft, the takeover was the biggest cross-border acquisition in 2010 that made the company a number one dealer in confectionery. Kraft Cadbury Takeover: Summary & Reasons | StudySmarter Cadbury employees suffered a triple blow after news that Kraft Foods was preparing to close the final salary pension plan from the British pastry chef. In February 2010, Cadbury accepted Kraft's GBP11.9 billion (USD19.7 billion) takeover offer after a battle that lasted more than 100 days. Home Management Case Studies Case Study: Krafts Takeover of Cadbury. After the takeover, Kraft would have a greater ability to compete with the giant Nestle on confectionery grounds by increasing its market share in Britain and enjoying the benefits of Cadburys strong geographical networking in Asia. T his alarmed unions that were already worried about the jobs of hundreds of people and whom the company did not give any formal assurance that it would protect them. A takeover is when an individual buys a company. It is simply an acquisition of another company.An example of such can be the Kraft Cadbury takeover.Kraft Foods is a division and. 3. See you there. Hershey dominates the US chocolate market. With such resistance, why would Kraft insist on taking Cadbury over? Finally, I will put forward to my suggestions. Such a deal clearly pushed Kraft as number 1 dealer in confectionery. In the light of unfavourable public comments after Krafts acquisition of Cadbury, the British takeover Group with encouragement from the British government, conducted a negotiation period in the United Kingdom on the possibility of some key changes in acquisition. Change the plan you will roll onto at any time during your trial by visiting the Settings & Account section. Warren Buffett blasts Kraft's takeover of Cadbury - The Guardian Krafts share price: $26.53; Exchange rate (as agreed): $1.66 / GBP. Such as management style, leadership, motivation factors ,and managing change. A perfect summary so you can easily remember everything. Save my name, email, and website in this browser for the next time I comment. Create a more seamless integration between technology and education delivery by providing a single based on new technologies and also integrated workflow, industry bestshow more content 94% of StudySmarter users achieve better grades. Motives behind Acquisition From the perspective of Kraft Foods this deal if carried well, will help them achieve a portfolio of 40+ confectionary brand. 2010 saw the most controversial takeover of British Cadbury by the American giant Kraft Foods. In 2019 Kraft Foods launched a hostile bid for Cadbury. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. Craft focus on the confectionery market for its promising market. On the other hand, the US chocolate company, Hershey, owns the rights to the Cadbury brand in the US, which it acquired in 1988 from Cadbury Schweppes. Kraft proposed another bid shortly. Cadbury is however the market leader in UK and Irelands confectionery where consumers have a liking for British chocolate containing vegetable oil having a richer taste in milk and also sweeter as opposed to continental chocolate having cocoa fat content; hence Kraft has a low share in such markets. Moreover, only 5 per cent of its shares were owned by short term traders. August 28, 2009- Irene Rosenfeld, CEO of Kraft, approaches Cadbury chairman Roger Carr for a possible merger. Also, despite having agreed on the fact that Cadbury would continue with its operation from London, post the turnover the headquarters of Cadbury was shifted to Zurich in Switzerland. Create flashcards in notes completely automatically. Kraft was attracted to Cadbury due its strong performance during the economic crisis. Furthermore, the two companies embraced different values, which strained the relationship between employees and the management team. Cadburys share rose to 7.83 on the announcement, surpassing the offering price from Kraft. The union representing the 6,000 British Cadbury workers asked parliamentarians for better protection for the employees of the newly acquired companies. In 2015, Kraft Food Groups merged with Heinz to become the 5. largestfood and beveragecompany in the world. Previous to 2011 amendments, companies have been mandatorily required to disclose their intention about the commercial rationale behind making an offer, their strategic business plans for the target company along their plans regarding the targets employees. Necessary cookies are absolutely essential for the website to function properly. Stronger participation in fast-growing 'instant consumption' trade channels. In my opinion, the first thing to note is the market prospect. Kraft takeover of Cadbury would jeopardise 30,000 jobs, warns Unite . Human resources management is very important.Ensuring the list of leaders and key Talents is equally important. Kraft Foods Inc.s origin dates back to 1923 when it was founded by James L. Kraft. Its 100% free. After almost 4 months of continuous resistance, the two companies struck a deal of acquiring Cadbury for 840 pence per share plus a special 10 pence per share dividend. These challenges led the Takeover Panel to revamp the UK Takeover Code and introduced a series of reforms in the Regulations to protect the target company in such takeovers. MakerDAO: A Decentralized Autonomous Organization for the Stablecoin Dai, Matic Network: A Layer-2 Scaling Solution for Ethereum, NEAR Protocol: A Sharded Blockchain for Scalable Applications, Effect of Digital Yuan On Global Monetary Systems, Guideline In The Bitcoin Market: The Significance, 6 Ways to Get Cash Fast in Emergency Situations, 5 Ways to Improve Employee Retention and Foster a Thriving Workforce, Financial Management for Small Businesses, Introduction to Investments Meaning, Objectives and Elements, Case Study of Kellogs: Marketing Strategy for Latin America, Case Study: Inventory Management Practices at Walmart, Advantages and Disadvantages of Organizational Change, Role of Information Technology (IT) in the Banking Sector. Requires a method of naming potential bidders in the advertisement at the beginning of the bidding period, regardless of who publishes the advertisement; And requires any public name unless approved by the expert group. The case discusses the takeover of UK-based Cadbury Plc (Cadbury) by US food maker Kraft Foods Inc (Kraft). You can click on this link and join:https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA. The purchaser, also known as the predator, directly contacts the shareholders and offers to purchase enough shares to take over the target company or change the management so that the takeover can be approved. An offer worth $17 billion and placed by Kraft would provide Cadbury Plc with consequent advantages and disadvantages. The purpose of this case study report is to analyse critically the hostile buyout of Cadbury by Kraft. As far as I am concerned, if Kraft wants to master the right to speak,they have to regard key personnel as the first thing. Firstly, the paper uses literature, existing research, whether theoretical or empirical to explain the aims of acquisitions, the types of M&A, motives for acquisitions, the different ways of financing an acquisition, the different measures that can be used to determine whether an acquisition has been a success or failure and the main success fac. March 16, 2010: Call for the adoption of the Cadbury Act as Krafts stage for MPs to have a barbecue. Kraft was interested in acquiring Cadbury due to its high growth rate even during the recession period. So it is a sweet upgrade for both of them. Case study: Kraft's takeover of Cadbury | Financial Times Overall with all his visionary leadership abilities and strategic decision making capabilities, Cadbury Schweppes split into pure confectionery leader Cadbury. offers FT membership to read for free. Litecoin vs. Ethereum Classic: Which is the Better Investment? Its product portfolio includes well-known chocolate, candy, and chewing gum brands such as Cadbury Dairy Milk, Halls, and Trident. In 2016, Mondelez launched a takeover bid for Hershey, but the bid was rejected by Hersheys board. Sign up to highlight and take notes. The company had seven brands, each generating annual revenues of more than 1 billion dollars. It was in fact even lower than the current Cadbury share price. Nelson Peltz, founder of the hedge fund Trian Fund Management also had his own role in the business of Cadbury. See you there. Ratio: 0.2589 Kraft shares per every Cadbury share (26.53/1.66 * 0.2589 = 4.133 + 4.13 = 7.13). For cost savings, you can change your plan at any time online in the Settings & Account section. As both firms have a rich history and distinct brand identities, the merger came to the attention of the global media and public on both sides of the Atlantic. Kraft completes takeover of Cadbury - Marketing Week (download the rest of the essay above). Kraft takeover could be bitter experience for Cadbury Many feel Cadbury has worsened in the last decade and. Krafts CEO visits the UK for a series of investor meetings. The acquisition and merger team responsible for overseeing this area reviewed the law and revised the Takeover Code in September 2011. The promise only covered 40% of the UK employees in the expanded company, which made Americans feel that Shock. Later he expanded by starting a line of beverages after a merger with Indian Schweppes changing the company name to Cadbury Schweppes. Cadbury had continued to be a strong performer in the confectionery industry and shown steady performance and growth in light of the turbulent economic times. Lerne mit deinen Freunden und bleibe auf dem richtigen Kurs mit deinen persnlichen Lernstatistiken. The Kraft Heinz Company is an American company that is the third-largest food and beverage manufacturer in North America and the fifth-largest food and beverage manufacturer in the world. Meanwhile, they can through the integration of the distribution system and new product development to increase revenue.The Economist hadpublished an article called "package".The article said:As the largest food distribution companies in America-Francisco,one reason for the success of the company lies in its acquisition strategy and tireless(Cadbury,2011).It also helps America to establish a modern and efficient food distribution system. Stitzer and his management team aimed at the global domination in the Confectionery world, while the stakeholders were much worried about the financial performance. The second-largest confectionery brand after Mars, Cadbury was founded by John Cadbury in Birmingham, London in 1824 and presently has its headquarters in Uxbridge in West London. Earn points, unlock badges and level up while studying. Copies of their letters are . They are also despondent of their lack of involvement in this decision. Premium Digital includes access to our premier business column, Lex, as well as 15 curated newsletters covering key business themes with original, in-depth reporting. Disclosures regarding estimated fees under the category of PR, legal, finance, account needs to be made by both the offeror and the offeree. Kraft 'acted irresponsibly' over Cadbury | Financial Times Kraft Foods and Cadbury's Global Marketing Ethics This article has been edited by Amitabh Ranjan (Associate, Lawsikho) and by Dipshi Swara (Senior Associate, Lawsikho). Example #1 Example #2 Advantages and Disadvantages Difference Between Takeover and Acquisition Frequently Asked Questions (FAQs) Recommended Articles Key Takeaways A takeover is a strategic move of a business entity to purchase a large stake (usually more than 50%) of the target company and get control over the latter. In this easy,firstly,I will discuss the powerful leadership, and then I will introduce the changes of management, including scale economy, Integrated distribution system, and Industrial structure optimization, thirdly, I will emphasis the value of brand, which can be concluded from the merge. Whats more,Mars became the world's largest candy maker, itControl 14.5% of global confectionery market share,The failure of merger cases is due to many cases,likecultural conflict, weak management,Loss of important managers. The cookies is used to store the user consent for the cookies in the category "Necessary". Irene Rosenfield, CEO, Kraft Food Industries Inc. had a keen interest in the confectionery business and proposed an offer to buy Cadbury to Carr, Chairman of Cadbury after Sunderland. Create beautiful notes faster than ever before. Becauseof the rapid development of confectionery market, it is growing at about 5% a year.Craft is eager to enter the confectionery market.