Image: Cadbury workers protest
Dominic Lipinski  /  AP
Workers of the British chocolate manufactures Cadbury demonstrate outside the Houses of Parliament in London against the sale of the Cadbury company to food giant Kraft on Tuesday.
updated 2/2/2010 2:46:19 PM ET 2010-02-02T19:46:19

Cadbury PLC shareholders have approved Kraft Foods Inc.'s roughly $19.5 billion offer to acquire the British candy maker — the final step in creating the global food giant.

The focus now shifts to how Kraft will combine the companies and prove it was worth the often-bitter fight.

Kraft announced Tuesday that nearly 72 percent of Cadbury shareholders voted in support of the deal.

Together, the companies have roughly $50 billion in annual revenue through sales in 160 countries with their product lineup ranging from Kraft Macaroni & Cheese to Cadbury's Creme Eggs.

The deal gives Kraft access to critical growing international markets like India and Latin America where Cadbury thrives and ups its presence in the lucrative candy and gum market.

"This combination is about growth and it is about the opportunity to create a global powerhouse," Kraft CEO Irene Rosenfeld said in an interview with The Associated Press.

However, the deal still faces some critics.

Kraft CEO Irene Rosenfeld is expected to meet with Britain's Business Secretary Peter Mandelson on Tuesday to discuss the company's commitment to the company and its employees.

Hundreds of Cadbury workers uncertain about their future protested the takeover in London's Westminster area, calling for guarantees for their jobs and conditions once the company comes under new ownership.

Some protesters chanted "Keep Our Jobs," while others held up banners which read "Don't Sell Us Out."

"Our fear is that the Kraft takeover is not in the national interest, and in the months of this hostile takeover process we have heard nothing from Kraft to calm fears that it is in the interest of the Cadbury work force either," said Jack Dromey, Unite's deputy general secretary.

Kraft wouldn't say if job cuts are planned but anticipates $675 million in savings from combining the two companies. Cadbury and Kraft have about 140,000 employees worldwide.

But Kraft's Rosenfeld said the company is still formulating its plans for Cadbury employees and management but feels it will be a positive end result.

Kraft plans to hold town halls Wednesday for employees.

"We are interested in this company for its brands and its people," she said.

But some believe there is the potential for a major culture clash between the British candy company and its new large American parent company. Rosenfeld says the company is committed to honoring Cadbury's heritage and sees many similarities in the two companies' values.

Kraft also must assuage leery shareholders in the U.S., including billionaire Warren Buffett, whose company Berkshire Hathaway is the company's largest shareholder.

The world's most famous investor spoke out against the deal several times — saying, among other critiques, that it was overpaying by using undervalued shares to complete the deal.

Kraft sidestepped a vote among its own stockholders by reducing the number of shares to be issued for the deal. But Buffett told CNBC in January that if he could vote against the final offer he would.

"I like Irene," he said on CNBC. "I mean, she's been straightforward with me. We just disagree. She thinks it's a good deal. I think it's a bad deal."

Rosenfeld, an industry veteran who worked for Kraft for more than 20 years, wouldn't comment on conversations with shareholders but said she feels good about the offer and believes shareholders will benefit in the long run.

Kraft made Rosenfeld CEO in 2006 to transform the company and she said this deal has helped put it on the path to do so.

Under her leadership, Kraft has changed management and restructured the company's business lineup including buying Group Danone SA's cookie and cereal business in 2007 and selling its Post Cereal business in 2008. It recently agreed to sell its frozen pizza business to help pay for the Cadbury acquisition.

"This acquisition is just one more step along the path for Kraft toward becoming a top-tier performer," Rosenfeld said.

The deal is expected to close this month.

"We will become one global powerhouse with enormous potential and we feel very anxious to get started," she said.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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