Daily View: Kraft's takeover of Cadbury
Commentators consider Kraft Food's takeover of British chocolate maker Cadbury, why the deal came about, what it means for the UK economy and whether politicians should have got involved.
The Times editorial says Lord Mandelson's attempt to discourage the sale of Cadbury's was inconsistent:
"So on what grounds does the Government think it acceptable for foreign interests to have a say in how Britain's airports are run, or our electricity is supplied, and to own our football clubs, but not to get their hands on a Cadbury's Flake?"
David Prosser in the Independent says Gordon Brown's pledge to protect British jobs was not only meaningless but also harmful:
"Nor should Britain's politicians have the right to interfere. If the British government began intervening in such decisions, no foreign company would want to operate here and the impact on unemployment would be far greater."
In the Guardian, Lynne Jones, the MP representing Bournville, tells how she was involved in campaigns to stop Cadbury being sold. She asks what changed between the bids last week and this week:
"The answer must surely lie in the activities of hedge funds and other investors who buy shares with the sole aim of making a fast buck from a takeover battle. Such casino investors have no interest in the long-term health of a company and, in the case of Cadbury, are quite happy to see the company saddled with over £7bn of debts, so long as they get their payout."
Ian King in the Times lists the British companies still doing well globally to reassure the reader that Cadbury's sale doesn't mean the end of the British economy:
"These businesses may not command the affection or love that Cadbury did - but they are going to be far more important to Britain's economic future. Credit Crunchie or not."
Hamish McRae in the Independent says Cadbury and Kraft's images are outdated as in reality they are both gobal conglomerates, which begs one question:
"The issue, then, is who might be the better manager of these brands. Here the response must be subjective. My own impression is that Cadbury has in the past been a company without a sufficiently clear objective; it became a hodge-podge of brands rather living on its reputation. But in recent years it has lifted its game and is currently well-managed.
Kraft has had only three years since it fully emerged from the Philip Morris umbrella and has yet to prove itself. I hope I am wrong in my instinct that it will make a mess of this purchase."
Larry Elliott in the Guardian isn't hopeful for Cadbury employees:
"The reality is that the takeover of Cadbury has been financed by £7bn of debt, making the confectioner ripe for a bit of what the management gurus call rationalisation but the rest of us call asset-stripping."
Tracey Corrigan warns in the Telegraph that this takeover doesn't guarantee success:
"It may sound unlikely that investors in both Kraft and Cadbury will lose out, but unfortunately that is perfectly feasible, on the basis that both companies may well have been better off on their own. Most takeovers destroy value, and the great Warren Buffett, a major investor in Kraft, has repeatedly warned its executives of the dangers of overpaying."
Links in full
Ian King | Times | There's more to British genius than Cadbury
Times | Hot chocolate
Guardian | Cadbury: Not such a sweet deal
Larry Elliot | Guardian | The sad lesson of Cadbury is the City still holds the whip
Lynne Jones | Guardian | No excuse to cut at efficient Bournville
Tracy Corrigan | Telegraph | Kraft's takeover leaves a bitter taste in the mouth
Hamish McRae | Independent | A sweet deal - or a takeover that is hard to swallow?
David Prosser | Independent | An empty promise to employees
David Wighton | Times | Glass and a half full for some, not for others
Paul Sharma and Alessandro Pasetti | Wall Street Journal | The Price Action Said It All
Robert Peston | BBC | Kraft takeover of Cadbury: the terms