NEW YORK — After months of fiercely resisting any deal, Cadbury agreed Tuesday to an improved takeover offer from Kraft, worth about $19 billion, to create the world’s largest confectioner.
Together Kraft, the maker of Oreo cookies and Ritz crackers, and Cadbury, the producer of Trident gum and Dairy Milk chocolates, would have more than $50 billion in annual revenue and a big presence in markets from the United States to India.
The deal continues a trend seen over the past decade, in which food companies have sought to gain scale by combining with one another. Most recently, Mars bought the William Wrigley Jr. Co. in 2008 for $23 billion.
“For Cadbury shareholders, it’s the best possible deal, given they were dealt a bum hand, because there were no counterbidders,” Jon Cox, food and beverage analyst at Kepler Capital Management in Zurich, said Tuesday. “The clear winner is Kraft.”
Kraft’s original, unsolicited offer, made in September, was worth about $16.7 billion. Cadbury consistently derided it as too low.
The new offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday.
Under the terms, Kraft will pay 500 pence in cash and offer 0.1874 new Kraft shares for each share of Cadbury. That amounts to a payment of 840 pence, or $13.80, per Cadbury share. Additionally, Cadbury will pay out a special dividend of 10 pence a share.
Roger Carr, chairman of Cadbury, who had used harsh language in fighting off the original bid, said in a joint statement that the new offer “represents good value for Cadbury shareholders.”
Irene Rosenfeld, chairwoman and chief executive of Kraft, said that for her company, the deal “transforms the portfolio, accelerates long-term growth and delivers highly attractive returns.”
In the joint statement, the companies cited their “highly complementary geographic footprint.” On the one hand, Cadbury will benefit from the supply chain of a larger company, Mr. Cox said, and on the other, Kraft will be able to push its products through Cadbury’s distribution network in the developing world.
Tuesday was the last day Kraft could raise its offer under British takeover rules. Cadbury shareholders now have until 1 p.m. London time Feb. 2 to decide whether to accept it. While the terms of the offer are “final,” Kraft reserved the right to raise its bid if a rival offer were made.
The deal would bring to a close an often acrimonious battle between the two companies. Cadbury management called the original offer “derisory” and dismissed the prospect of being absorbed into what it called a slow-growing food conglomerate.
The prospect of a takeover of the 186-year-old British institution, especially by an American multinational like Kraft, sent shudders throughout Britain and prompted a wave of public protests. The Mail on Sunday, one of the biggest-selling British newspapers, ran a “Keep Cadbury British” campaign.
Politicians and unions have pointed to both a loss of jobs — the Unite labor union has estimated that as many as 30,000 jobs could be lost — and of national pride. Peter Mandelson, the British business secretary, warned Cadbury shareholders last month against trying to make a “fast buck.”
“It’s sad to see another British company bought up by a multinational,” Mr. Cox said, “but that’s finance”
Cadbury had argued repeatedly that it would prefer to remain independent, pointing to faster-than-expected success in its turnaround program. But its executives have acknowledged that Kraft’s bid put the company in play and that they would consider any offer made at the right price.
Representatives for Cadbury have held talks with Hershey, the American company whom Cadbury viewed as a preferable merger partner, according to people briefed on the matter.
For Hershey, buying Cadbury would prevent it from being relegated to a mostly U.S. company. Hershey moved closer to making a bid in recent days, lining up more than $10 billion in financing, these people said.
Hershey had been waiting for Kraft to unveil its final offer Tuesday before it made its final decision on a bid but analysts have said that Hershey would most likely be unable to top the much larger Kraft in a bidding war. Other potential suitors, including Nestlé of Switzerland and Ferrero of Italy, dropped out.
“What triggered Kraft’s move were the reports about Hershey,” Mr. Cox said. “It’s pretty much all done and dusted. I don’t think an interloper will break up this deal.”
The offer announced Tuesday does not require the approval of Kraft shareholders, Kraft said Tuesday.
Warren E. Buffett, whose Berkshire Hathaway is Kraft’s largest shareholder, has warned Kraft to avoid overdiluting its shareholders by issuing too many new shares.
William A. Ackman, who runs the hedge fund Pershing Square Capital Management and who has been amassing a big position in Kraft, has echoed Mr. Buffett’s concerns.Chris V. Nicholson reported from Paris. Andrew Ross Sorkin contributed reporting from New York.
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