Retail News South Africa

Big job cuts if Kraft takes over Cadbury

LONDON, UK: A takeover of British confectioner Cadbury by US food giant Kraft could mean the loss of 7,000 jobs at Cadbury and 20,000 at the company's sub-contractors, the British trade union Unite warned on Wednesday, 13 January 2010.

The union said Kraft would be saddled with debt of US$22 billion (€25 billion, $36 billion) after the takeover, forcing it to impose job cuts.

"Kraft ownership could see control of Cadbury move from the UK to Illinois, USA, in the process putting at risk 7,000 direct jobs and at least 20,000 more jobs in the wider supply chain," Unite warned in a statement.

"Unite is seriously concerned that the interests of the company, its workforce and its extensive supply chain will be placed at risk if Kraft is able to push through its hostile bid."

The union recalled that between 2004 and 2008 Kraft shed 19,000 jobs and closed 35 sites to help pay down its debt.

Kraft's offer in cash and shares is worth £10.5 billion (€11.7 billion, $16.9 billion ), a proposal that Cadbury dismissed again Tuesday as "derisory."

On Wednesday, Italian chocolate maker Ferrero dropped out of the race to buy Cadbury after deciding to end talks for a joint bid with US counterpart Hershey, a source said.

"The conditions are no longer in place to proceed with Hershey," a financial sector source said, without giving further details.

Ferrero and its advising bank Mediobanca declined to comment.

Source: AFP

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