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Last updated: 19 january, 2010 - 17:37 GMT

Kraft Foods and Cadbury agree on $19.5bn takeover deal

Cadbury chocolate bar being broken in two

A protestor breaks a Cadbury chocolate bar outside the Bournville factory, Birmingham, after it was announced that Cadbury had backed a higher takeover offer from its US suitor Kraft Foods.

British chocolate firm Cadbury has ended a six-month takeover battle by accepting an improved $19.5bn bid from the US food giant Kraft, to create the world's largest maker of chocolate and sweets.

Kraft Foods' previous offer of $17.1bn had been dismissed by the British company's management as "derisory".

Kraft still has to persuade a majority of Cadbury's shareholders to accept the deal, and the door remains open until 25 January for its rival Hershey to make a counter offer.

However, many in Britain are disgruntled at the prospect of a historic brand losing its independence, and worry about the loss of management control and the risks of future job losses.

The BBC's business editor Robert Peston had an inside track on the late night negotiations.

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Yet while some have objected to the deal, the reaction of the City of London and most insitutional shareholders has generally been one of acceptance. Russell Padmore reports.

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First broadcast on World Business News

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