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Check Out Line: Kraft wants to consume Cadbury

September 8, 2009

cadbury1Check out efforts by Kraft to gobble up confectionary giant Cadbury.

Kraft offered $16.7 billion for the world’s No. 2 candy and chocolate maker on Monday. Cadbury shares soared after it rejected the initial bid as investors bet Kraft or another company will sweeten the offer.

Analysts said Cadbury has few options but to look for a higher bid or more cash after the Kraft offer.  Investors like the logic of the combination and few, if any, counterbids are seen likely to emerge. 

Shares in Kraft, the maker of Oreo cookies and Ritz crackers, tumbled on Tuesday as investors expect the company’s earnings to be hurt in the near term if a deal goes through.

Meanwhile, Kraft’s offer could start a new round of food industry consolidation, analysts and deal advisors said.

Also in the basket:

Smithfield Foods posts wider loss; hog prices down

Ferragamo sees recovery signs, crisis ongoing

Steering a Young Label in Lean Times (Wall Street Journal)

(Reuters photo)

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