Kraft’s acquisition of Cadbury

Thursday 21 January, 2010

I caught with interest this article on Kraft’s acquisition of Cadbury Kraft’s bid has Brits cheesed off by Henry Chu.  I find it somewhat amusing how all this posturing goes on that really doesn’t make a difference.  It’s ridiculous that on 1 day a transaction is labeled a “hostile takeover,” & a “sweetheart deal” the next.  Chu claims that Hersheys in America is a corollary to Cadbury in Britain, but I don’t get the warm & fuzzies from Hershey’s, which makes me wonder if the same is really true about the Brits.  When you get right down to it, all of the politicians, workers/unions, consumers don’t matter when an acquisition offer is on the table.  Everything that’s said is simply for negotiation purposes.

I will admit that there truly are differences in chocolate from country-to-country.  When I was living in Germany & flying home to the US, & perhaps stopping in Belgium, I would pick up some M&M’s in each country & do a comparison when I got home.  I’m a bit embarrassed to admit that American M&M’s are sweeter than the European variety, but I do have a sweet tooth, so I still prefer the American version.  The European chocolates are smoother, but I like my sweets strong & fast, & American chocolates smack you in the face with their sweetness by comparison, so I remain by my native tastes.

Perry Yeatman, author of Get Ahead by Going Abroad & whom I interviewed last year , is in charge of investor relations for Kraft.  She has been ecstatic that Kraft is finally expanding its footprint globally.  Typically conservative Midwestern Kraft had been slow to approach the rest of the world, but with the Cadbury acquisition will have access to many markets with 1 fell swoop that would have been much more difficult & expensive to build on their own.

Granted, maybe Cadbury is a British icon, but they all still fall prey to economic realities.  The bottom line is this deal makes business & financial sense.  The distribution networks are complementary.  All that matters is the British shareholders held out for more money, & as soon as they got it, they were satisfied.  For better or worse, with global M&A, it’s still the numbers that matter more than anything else.


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