Kraft Foods is set to receive enough acceptances from Cadbury shareholders to seal its Ł11.7 billion takeover by around 5:00 p.m. Tuesday and start the tough integration of Cadbury's 45,000 worldwide employees.
The North American foods group is expected to win more than 75% of votes for the deal at which level it can delist Cadbury shares in London, but it only needs 50% plus one share to take control of Cadbury and declare victory.
Cadbury shareholders have until 1:00 p.m. to cast their votes and with the deal recommended by the Cadbury board and no rival bidders envisaged, the takeover of the confectioner is expected to be declared complete some four hours later.
“We would expect Kraft to win comfortable support for the deal given it's agreed and the supportive comments from Cadbury shareholders,” said an industry source close to the situation.
Meanwhile, Cadbury's workers gathered in central London at midday Tuesday to urge the British government to do all they can to protect Cadbury's 4,500 UK workforce and future investment at its British sites as they join with Kraft's 98,000 global staff.
During an acrimonious near five-month bid battle, Cadbury Chairman Roger Carr has attacked Kraft's business model, financial performance and record of integrating businesses leaving Kraft's CEO Irene Rosenfeld to try and soothe worries.
Rosenfeld is expected to outline her strategy to win the hearts and mind of Cadbury's staff, while delivering the cost savings and revenue growth she has promised to keep her largest shareholder Warren Buffett happy.
She has promised $675 million of annual cost savings from the deal, which will mean job cuts, analysts said.
Cadbury's annual sales are only one fifth of Kraft but the British group will be a major driver for growth at a combined company with over $50 billion of sales. Kraft will still be the world's No 2 food group after Nestle but leapfrog Mars-Wrigley to be the world's biggest confectionery group.
Kraft agreed its friendly deal to buy Cadbury on January 19 in an offer that valued Cadbury shares at 840 pence with 60% of the price coming as cash and the rest in new Kraft shares. With the fall in Kraft shares, the current value of the bid is around 830p a Cadbury share.
Last month, potential Cadbury bidders like Hershey, Italy's Ferrero and Nestle ruled out bids leaving the field clear for Kraft to complete its deal for the British group.
A Kraft-Cadbury combination will bring together Cadbury's Dairy Milk chocolate, Halls cough drops and Trident gum with Kraft's portfolio of Milka and Toblerone chocolates, Oreo biscuits, Maxwell House coffee and Philadelphia cheese. (Reuters)