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    Group 2-Business External Growth - Takeover

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    Evandra Ramadhan Azriel Sanyoto
    1) Kraft took over Cadbury in 2010 in a hostile takeover after Cadbury resisted the acquisition for over a year. 2) The takeover created short term benefits for both companies by providing economies of scale and allowing access to new markets and brands. 3) However, the takeover was not sustainable, as Kraft struggled with high debt levels which led them to split into two companies, while Cadbury was renamed and its British ownership was lost.

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    Group 2-Business External Growth - Takeover

    Uploaded by

    Evandra Ramadhan Azriel Sanyoto
    66 views4 pages
    1) Kraft took over Cadbury in 2010 in a hostile takeover after Cadbury resisted the acquisition for over a year. 2) The takeover created short term benefits for both companies by providing economies of scale and allowing access to new markets and brands. 3) However, the takeover was not sustainable, as Kraft struggled with high debt levels which led them to split into two companies, while Cadbury was renamed and its British ownership was lost.

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    Group 2-Business External Growth_Takeover

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    1) Kraft took over Cadbury in 2010 in a hostile takeover after Cadbury resisted the acquisition for over a year. 2) The takeover created short term benefits for both companies by providing economies of scale and allowing access to new markets and brands. 3) However, the takeover was not sustainable, as Kraft struggled with high debt levels which led them to split into two companies, while Cadbury was renamed and its British ownership was lost.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    66 views4 pages

    Group 2-Business External Growth - Takeover

    Uploaded by

    Evandra Ramadhan Azriel Sanyoto
    1) Kraft took over Cadbury in 2010 in a hostile takeover after Cadbury resisted the acquisition for over a year. 2) The takeover created short term benefits for both companies by providing economies of scale and allowing access to new markets and brands. 3) However, the takeover was not sustainable, as Kraft struggled with high debt levels which led them to split into two companies, while Cadbury was renamed and its British ownership was lost.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    GROUP 2

    External Growth: Takeover


    Kraft Cadbury Takeover
    Members:
    1. Evandra Ramadhan Azriel Sanyoto (09)
    2. Hans Carlo Benedictus Siburian (12)
    3. Lathifa Drupadi (16)
    4. Lintang Nabila Divani (17)
    5. Tasya Maysan Hariadi (24)

    I. Takeover Definition
    A takeover occurs when one company purchases another company. It is simply an
    acquisition of another company. A takeover occurs when one company makes a successful bid to
    assume control of or acquire another. Takeovers can be done by purchasing a majority stake in
    the target firm. Takeovers are also commonly done through the merger and acquisition process.

    ● Differences between acquisition and takeover


    The major difference between acquisition and takeover is that a takeover is a special form
    of acquisition that occurs when a company takes control of another company without the
    acquired firm's agreement. Takeovers that occur without permission are commonly called
    hostile takeovers.

    II. Takeover Advantage and Disadvantage


    A. Advantages
    - The takeover was the biggest cross-border acquisition in 2010 that made the Kraft
    company become the number one dealer in confectionery.
    - The combination of Kraft products such as Toblerone and Oreo with Dairy Milk
    chocolates from Cadbury would also help to save money on annual company costs of
    research and development, advertising, branding and procurement.
    - Kraft and Cadbury together would generate more sales than the two companies separately
    which would result in higher earnings per share.
    - The takeover would also allow Kraft to compete with other companies such as Nestle,
    Ferrero and Hershey. Lastly, Kraft's growth opportunities would enable access to new
    brands and new distribution channels.

    B. Disadvantages
    - Different companies have different structure and culture, this fact tells us why it took a
    time for Kraft to fully inquire Cadbury company factories and workforce to their system.
    - Lots of incompatible workforce that lead into lots of managers and workers laid out from
    the company they worked in.
    - Kraft needed lots of capital in order to paid dividends towards shareholders while the
    Cadbury adaptation.

    III. Business Growth Comparison Before and After The Takeover

    Before After

    Continued to be a strong performer Despite the high debt of Kraft after the
    in the confectionary industry and takeover, employee layoffs and
    shown steady performance and closing some of the UK factories, the
    growth in light of the turbulent deal allowed Cadbury to expand
    economic times

    Kraft can’t compete with Nestle High debt of Kraft after the takeover

    Kraft needed Cadbury to provide scale Employee layoffs and the closing of
    for the snacks business some of its UK factories

    Cadbury can’t expand into a global The deal allowed Cadbury to expand
    corpora into a global corpora

    At the time of the takeover, Kraft Allow Kraft to compete with


    Foods was the second largest food companies such as Nestle, Ferrero and
    conglomerate in the world and want to Hershey
    compete with Nestle

    Kraft can’t fully grow because he need Kraft's growth opportunities would
    support from another company enable access to new brands and new
    distribution channels

    IV. Sustainability
    In 2009, Kraft launched a hostile bid for Cadbury. However, not only was
    Cadbury not for sale but the company also resisted the Kraft takeover.

    In 2010, Kraft took over Cadbury Co. Following a long fight, Cadbury Chairman
    Roger Carr agreed to a deal in January after extracting a last-minute sweetener.
    When the transaction closed in March 2010, Cadbury shares had returned 55%,
    including dividends, since the battle commenced.

    18 months after the takeover, Kraft announced a split. In 2012, Kraft spin off its
    grocery business into Kraft Foods Group, which was later bought by Heinz to
    become Kraft Heinz Co. Cadbury stayed in the remaining business, renamed
    Mondelez International Inc. Kraft Heinz flopped as Mondelez flourished.

    On February 22, 2019, the Kraft Heinz shares dropped 27% on shock results. It
    happened because Kraft Heinz has a high debt. On the other hand, Cadbury
    (renamed as Mondelez), a brand that was once a proud tradition of ethical British
    businesses was not only transformed into a global corporation but also lost its
    British ownership.

    In conclusion, the takeover is not sustainable. Kraft flopped because of the high
    debt, causing them to split. Cadbury is not with Kraft anymore, renamed as
    Mondelez International Inc. And Kraft was later bought by Heinz to become Kraft
    Heinz Co. But they flopped because the company is so focused on cost-cutting, it
    lost sight of its business aim: to produce food people wanted to eat.

    Kraft Cadbury Takeover: Summary & Reasons | StudySmarter

    Penjualan Nestle 2010 mencapai tiga kali lipat

    Analysis of Kraft's Takeover of Cadbury

    Cadbury Takeover Has a Bittersweet Ending


    https://www.reuters.com/article/us-kraftfoods-idUSTRE77323C20110804

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