Approval expected for Kraft-Cadbury deal

LONDON -- In the end, the deal was too sweet to turn down.

On Tuesday, British chocolate maker Cadbury advised its shareholders to accept an improved cash-and-stock offer from U.S.-based Kraft Foods worth more than $19 billion, potentially concluding a months-long hostile takeover battle.

Endorsing Kraft's new offer is a dramatic reversal for Cadbury's board, which vociferously opposed the takeover for months, alongside some British politicians, chocoholics and campaigners such as the man outside of Cadbury's Birmingham factory who flamboyantly dresses in a Union Jack waistcoat and stands next to a placard that reads, "Hey Yanks Keep Out."

If sold, Cadbury will join a long list of British brand names that have lost their independence in recent years, as in the 2008 sale of Jaguar Land Rover to Tata Motors of India.

"Is another chunk of Britain going abroad?" asked the Sun, Britain's best-selling newspaper, which on Tuesday ran a mock map of the United Kingdom made out of chocolate, with a chunk missing off the side.

A Kraft-Cadbury combination would bring together more than 40 confectionery brands, each with annual sales in excess of $100 million, according to Kraft, which would rank alongside Mars as one of the world's biggest candy makers upon the deal's completion.

"We have great respect for Cadbury's brands, heritage and people," Irene Rosenfeld, Kraft's chief executive, said in a statement. She reportedly flew to Britain last week to argue Kraft's case personally before Cadbury's biggest investors. "We believe they will thrive as part of Kraft Foods," Rosenfeld said.

National treasure

Kraft, the Illinois-based maker of Oreo cookies and Toblerone chocolate, has until Feb. 2 to persuade the majority of Cadbury's shareholders to accept the offer. Britain's Takeover Panel, which regulates mergers and acquisitions, said Tuesday that Hershey and Ferrero, the Italian confectionery group, have until Monday to jump in with a rival bid.

If Kraft's deal is accepted -- as many analysts predict -- the move would mark the end of independence for the 186-year-old British company, worshiped here for products such as Creme Eggs and Dairy Milk chocolate bars.

Cadbury dates to 1824, when John Cadbury, a Quaker, opened a shop in Birmingham and began selling tea, coffee and cocoa beverages as an alternative to alcohol. Since its beginnings, Cadbury has been deeply ingrained in British life -- summers, for instance, feature children (and adults) across the country clutching a vanilla ice cream cone with a Cadbury's Flake chocolate bar poking out of the top.

The sale of such an iconic British brand to the United States' biggest food conglomerate has met patriotic angst in some quarters and prompted headlines such as "Hands off our chocs." Some sweet-toothed Brits have expressed fears that a Kraft-owned Cadbury would entail American-tasting chocolate, which many here regard as loathsome.

"We face an appalling choice of succumbing either to Kraft, makers of the plastic flaps of orange cheese, or to Hershey, whose Hershey bars have been likened in flavour -- by independent experts -- to a mixture of soap powder and baby vomit," Boris Johnson, the mayor of London, wrote last month in the Daily Telegraph.