Kraft keeps systems integrators waiting over Cadbury


Kraft keeps systems integrators waiting over Cadbury

Ian Grant

Systems integrators will have to be patient a little while longer while US food maker Kraft fends off chocolate makers Ferrero and Hershey to complete its £11.9bn acquisition of UK sweets maker Cadbury.

Kraft, which has been pursuing Cadbury since last September, had its offer of 840p per share plus a special dividend of 10p accepted by the Cadbury board early on Tuesday morning.

The takeover panel later issued a statement giving rivals Ferrero and Hershey until 12 January to make a competing offer after earlier indications they were interested in bidding for the firm.

IT integration

Cadbury, an SAP user, said earlier it would streamline its £70m a year IT bill, much of which was spent locally. This followed an internal analysis that suggested two-thirds of Cadbury's IT spend did not "deliver the full benefits of effective procurement", according to CFO Andrew Bonfield.

Kraft, also an SAP user, said the due diligence process would begin if and when the offer became unconditional on 3 February. It declined to say where or how the firms' IT systems might be integrated.

In a video interview, Kraft chairman Irene Rosenfeld said, "We see substantial synergies, pre-tax synergies, as a result of operational efficiencies in combining the two companies."

She said there were "excellent revenue synergies" to come from increased investment in distribution, marketing and new product development.

The merger would see the creation of a global company with more than 40 confectionery brands, each with annual sales of more than $100m. The two have complementary geographic footprints, with leading positions in Brazil, Russia, India, China and Mexico.

The overlapping footprints also provide "the potential for meaningful cost savings and revenue synergies," Cadbury said in a statement. "The combined group will have best-in-class infrastructure in both traditional and instant consumption routes to market," it said.

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