Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Copy of Copy of Kraft Cadbury Acquisition

No description
by

Heather Presley

on 23 July 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Copy of Copy of Kraft Cadbury Acquisition

Tax Consequences
Become a Global
Powerhouse
Kraft wants:
Increase

growth
Better access to
distribution networks
Increase presence in
emerging markets

Opposition from Cadbury
and its shareholders

New standalone business appears successful
Loss of

iconic brand status
Loss of

heritage


Dilution of Cadbury's
brand image
in the confectionery business
British Trade Union -Unite "
Keep Cadbury Independent
" campaign
Expectations from the Proposed Transaction
Cadbury
Maintain
cultural heritage
Maintain
iconic brand
status
Kraft Foods
Add value
for its shareholders
Focus on
growth
Expand footprint
in global market
Cadbury:
Established
global name
Underperforming
stock
Established
sales channels
in emerging markets
Similar market
Kraft + Cadbury
Competitive Advantage

Kraft
Lacks presence
in emerging markets
Cadbury
Slow growth
of core business
Together
Job preservation
for Cadbury
Take advantage of
synergies
$675 million
$300 Million of operational synergies
$250 Million of general and administrative synergies
$125 Million of marketing and selling synergies
Compete against Mars-Wrigley
14.4% confectionery sales
Why did Cadbury Become a Target?
Kraft Shareholder's Opposition
Deal Breakdown
Type B Reorganization
"
Stock-for-stock
" acquisition
60% cash, 40% stock
Shields Kraft & Cadbury from tax consequences
"Creeping acquisition"
Advantages - Kraft will be able to use Cadbury's tax attributes in future
Underperforming
Cadbury's Demerger
Separation of confectionery and drink segment
£1 million fine due to the recall of
salmonella
-contaminated chocolate bars
Mars-Wrigley combination
#1 in confectionery market
New Profit Margin set by Carr
10% --> 15%
Warren Buffett
- 9.4% ownership
Against the deal
Doesn't want to take on more debt
Disagreed with sale of Pizza business
Kraft shares 68 cents
Total Offer Per Share: $13.40
$7.98 Cash
$5.42 Stock

Total Offer: $18.5 billion
$10.9 billion Cash
$7.5 billion Stock

February: 71.73%
$13.1 billion
June: 28.27%
$5.4 bilion

$9.5 billion unsecured notes to finance acquisition
Obstacles
Hershey
Nestle
Ferrero Rocher
U.K. community
Warren Buffett
Went public with the deal
Irene wrote letter to Cadbury shareholders
British Takeover Panel:
Formal bid or walk away

Becomes Hostile Takeover
Post-Merger
Post-merger Analysis
Net revenues 2011 - $54,365 billion
Synergies: $800 million
Cost of integration: $1.2 billion vs 1.5
Net revenue in developing markets
2009 - 2010 - 71.1% increase
Total 2009 -2011 - 99% increase
Net revenue in Europe markets
2009 to 2010 - 32.6%
Total 2009 - 2011 - 79% increase
Net revenues generated outside US:
2009 -49%
2010 - 57%
2011 - 60%
Post-merger Analysis
Changes in Cadbury:
Cadbury PLC Cadbury Limited
Wholly-owned subsidiary
Record according to FASB 141(R)
CEO, CFO, and finance director resign immediately
Kraft closed Somerdale Facility
Profit Margins
2009: 13.4%
2010: 11.5%
2011: 12.2%
2012 Spin-off adjustments
Mondelez Inc. & Kraft Foods Group Inc.
Buffet approves
Success?
Cadbury
not
a
BROKEN

company
Full transcript