Kraft Foods Inc. and Cadbury PLC (A): A Nutritious Association?
This case comprises two parts. In "Kraft Foods Inc. and Cadbury PLC - Part A - A Nutritious Association?", an investor wonders whether the acquisition of Cadbury is based on sound business sense and whether it will be beneficial to him as a Kraft Foods shareholder. He also puzzles over the value of the mixed payment offered to Cadbury's shareholders. Details are provided about Kraft Foods's activities and businesses, followed by a description of Cadbury. Each company's historical financial statements are appended. Kraft Foods's rationale for the acquisition is provided, together with the structure of the original and final offers. "Kraft Foods Inc. and Cadbury PLC - Part B - A Sweet Divorce?", which focuses on the subsequent "demerger" of the Snacks division less than two years later, can be analyzed in its own right as a second step. Alternatively, the instructor can use it as a conclusion to highlight points related to strategy and disclosure or to the ex-post measurement of synergy effects.