Cadbury’s takeover leaves a bitter taste

Last week the Takeover Panel Executive issued a statement of public criticism of Kraft Foods Inc. for failing to meet the standards of care and accuracy required by the Takeover Code when making statements about Cadbury’s Somerdale facility during the course of its offer for Cadbury. Kraft repeatedly issued statements that it would be in a position to keep the Somerdale facility running and " to invest in Bournville, thereby preserving UK manufacturing jobs.". 

The Panel accepted that Kraft had only had access to “limited information” in the public domain when making such statements. When Kraft took over earlier this year, it was apparently only then that the company realised that Cadbury's plans to close the Somerdale facility were so far advanced that it was unrealistic to reverse them and that in excess of £100 million had already been invested by Cadbury in building new facilities in Poland to which the Somerdale production lines would be transferred. The Takeover Panel’s main criticism of Kraft was that its repeated announcements that it could continue to operate the facility in the UK had “no reasonable factual basis” whatsoever.

Here at Renney & Co we find it quite remarkable that Kraft was unaware of Cadbury’s irreversible financial commitment to transfer the business to Poland. No doubt Cadbury’s hundreds of redundant staff will also be asking themselves how it is that Kraft was so ignorant of the facts, and able to make such empty promises, leaving a bitter taste in everyone’s mouth.

At Renney & Co we advise businesses and individuals on the rights and wrongs of redundancy situations. If you are looking for advice on redundancy or business transfers, feel free to give us a ring. As a sweetener we offer a no obligation telephone consultation.