The Cadbury – Kraft Takeover

THE CADBURY –

KRAFT TAKEOVER

British multinational company

Started by John Cadbury in 1824

Dairy Milk produced in 1905

Merged with Schweppes in 1969

Merged with Kraft in 2010 ($11.6 billion deal)

Merged with Mondelēz International in 2014

John Cadbury

World’s 2nd largest food company (After Nestle)

Began in Chicago by James L. Kraft

Known for selling 31 types of cheese

Change name to Kraft Cheese Company in 1932

Started with ice cream manufacturing and expanded into a full range of dairy products

James L. Kraft

Before the

takeover…

Why did Kraft

takeover

Cadbury?

1. Great access to sharp growth

2. Knowledge sharing

3. Be a leader in confectionary items

4. Great move for the company

5. Increased revenue by $1 billion in 2013.

6. Economies of Scales

7. Increase monopsony power

8. Help to negotiate with other bigger

retailers and suppliers

9. Strengthens brand

10. Higher performance = higher revenue

11. Better reputation

12. Better control of company

The Negatives to

Cadbury

1. Damages heritage 2. Weakens brand 3. Staff burnout

4. Risk of losing benefit schemes

5. Trust issues

Type of

Integration

Conglomerate integration

E.g. Kraft – dairy products

Cadbury –confectionary

products

“Proposed deals bring together two

very different organisations with

cultures and histories that appear to have

more differences than similarities.”

Problems with

the integration

1.

A lot of management time will be taken up

2.

- Cadbury merged with Schweppes in 1969

- It ranked low on profitability and competitiveness.

- May 2008, Cadbury Schweppes split its business into two separate companies;

- Cadbury focused on confectionary market

- Schweppes focused on US drinks.

- So will this happen to Cadbury – Kraft? … IT DID

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