Public RelationsKraft's $16.7-billion Cadbury bid may thaw mergers
Kraft Foods Inc’s £10.2-billion($16.7 billion) bid for Cadbury Plc may be a sign that Europe’s frozen takeover market is beginning to thaw after the slowest August in five years.
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Kraft, the maker of Oreo cookies, said on Monday it would pursue the acquisition after the British maker of Dairy Milk chocolate rejected the offer.
The 745 pence-a-share proposal may trigger a competing offer from Nestle SA and Hershey Co, forcing Kraft to increase its bid, according to Warren Ackerman, an analyst at Evolution Securities in London.
The acquisition would be the biggest cross-border deal this year and follows the $21 billion of European takeovers announced in August, according to data compiled by Bloomberg.
Companies are revisiting plans for mergers that had been shelved during the credit crisis amid signs the recession may be easing.
The MSCI World Index has gained 58 per cent since hitting a 14-year-low in March, making it easier for firms to fund takeovers with stock.
“With equity prices higher, you have increased confidence in the corporate sector and intra-industry mergers are likely,” said Peter Hahn, a former managing director at Citigroup Inc who now lectures on corporate finance at London’s Cass Business School.
Deutsche Telekom AG, the region’s biggest telephone company, and France Telecom SA plan to merge their UK mobile-phone units to create the country’s largest cellular operator, the companies said today.
Investors in Zain, Kuwait’s biggest telephone company, are near to selling a 46 per cent stake for almost $14 billion, according to National Investments Co, which is advising the sellers.
Companies worldwide have led $36 billion of takeovers in the past 10 days, according to Bloomberg data. Walt Disney Co. agreed on Aug. 31 to buy comic-book creator Marvel Entertainment Inc. for about $4 billion. The same day, Baker Hughes Inc. agreed to buy BJ Services Co for $5.5 billion in the largest oilfield-services company takeover since 1998.
EBay Inc agreed a day later to sell 65 per cent of its Skype internet-calling unit to a group led by firm Silver Lake for about $2 billion.