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Kraft/Cadbury Merger Sweetened, Berkshire Hathaway Skeptical

By Chuck Sudo in Food on Jan 5, 2010 5:40PM


Kraft Foods feels they strengthened their ongoing bid to purchase the English confectioner Cadbury today by selling their pizza business to Nestle. The sale effectively rules out Nestle as a competing bidder for Cadbury while also adding more on-hand cash to Kraft's estimated $16.4 billion offer to buy the company, making Kraft the overwhelming front runner.

Cadbury still views the Kraft offer as "derisory," and Berkshire Hathaway is also skeptical. Warren Buffett's investment company voted against Kraft's proposal to authorize the issuance of up to 370 million shares to further sweeten Kraft's offer to Cadbury as a possible "blank check" for Cadbury to fill. Berkshire did say it could change its vote depending on what the final proposal for the Cadbury purchase looks like. Under British takeover rules, Kraft and any other bidders for Cadbury need to have fully financed bids by January 23.