Kraft, Cadbury Agree to $19.5 Billion Deal

The Associated Press reports Cadbury has agreed to a fattened $19.5 billion takeover offer from U.S. food group Kraft in a deal that would create the world''s biggest chocolate maker. The board of Cadbury PLC gave up a four-month fight to remain independent and recommended shareholders take Kraft''s offer of 840 pence ($13.78) per share, amounting to 11.9 billion pounds. Cadbury shareholders would also get a 10 pence dividend previously promised by Cadbury. The revised bid is for 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, still somewhat less than some analysts believed the company is worth but 50 percent higher than Cadbury''s market value before Kraft went public with its approach in September. Kraft Foods Inc., still has to persuade a majority of Cadbury shareholders to accept the deal, and the door remains open for The Hershey Co. to jump in with a rival bid. The combined companies would be the world leader in chocolate and sweets, Kraft said, and No. 2 globally in the high-growth gum market. Kraft has until February 2 to win acceptance from holders of a majority of Cadbury shares.