There’s nothing like some small, local stories to add a human touch to a tense, cross-border, mega-bid battle.
Such is the case with Kraft’s $16.8bn bid for UK confectionery group Cadbury.
As the war of words – and speculation about counter-offers – heats up, locals in England’s Bournville, a virtual company village for Cadbury for nearly 130 years, and the small town of Keynsham, home to a red-brick factory that makes Cadbury candy bars, have plenty to say about the bid battle.
In a colourful report on Wednesday, Bloomberg takes us to Bournville, setting the scene thus:Around the neat, red-brick houses and the cricket ground in Bournville, where the Cadbury family built their chocolate business amid the industrial sprawl of central England, the villagers are anxious.
And continues:
Employees at the Cadbury factory declined to comment yesterday as they filed home. The company makes chocolate brands such as Flake and Crème Eggs. Cadbury, which employs 45,000 worldwide, still sells chocolate carrying the Bournville name.
The Wall Street Journal, meanwhile, finds an English town that is 100 per cent pro-Kraft, giving us a glimpse of life in to Keynsham.
The unlikely hero of the town’s “Save Cadbury’s” campaign is none other than foreign aggressor Kraft. As the Journal explains:
Cadbury, plans to close the facility and move its 500 jobs to Poland. Kraft, in its letter to Cadbury management outlining its $16.73 billion takeover offer, said it believed the factory, called Somerdale, could be kept open. Indeed, the letter from Kraft Chief Executive Irene Rosenfeld said a deal would increase jobs in the U.K.
Thus, as investors wait to see if a white knight will rescue Cadbury from Kraft, residents in this quiet old market town are looking to Kraft as the one in shining armor.
Yes, Cadbury is a “British institution”, as the FT notes in an editorial comment on Wednesday, but it is also already a global company and Tom Stitzer, its chief executive, is American. The issues are global ones, not matters of national identity, it continues, concluding:“Kraft’s attempted takeover of Cadbury may yet melt away, become hostile, or become competitive. What is encouraging is that the arguments surrounding it are about global business, not national pride”.
But in the eyes of The Times’ Carl Mortished, the bid-battle saga is all about “new imperial realities“. He explains: Without Cadbury, Kraft is just a big American food company — profitable but dull, a stack of stuff on Wal-Mart’s shelves, a business that rises and falls with the waistline of Joe Plumber. Kraft’s core business is processed cheese and frankfurters, not a big draw in Bangalore. Recently, it has added French biscuits (Lu) and Swiss chocolate (Suchard), but the pie chart of Kraft’s revenues that was displayed yesterday by the company says it all. More than two thirds of Kraft’s turnover is North American and, for the foreseeable future, blue-collar America will be a dead end for sales.
This bid is “not about cost savings”, he continues:
It is not about the Bristol factory that Ms Rosenfeld [Kraft's chief executive] hints might escape a Cadbury closure plan, not about Bournville, the model village built by Cadbury for its workers, not even about job prospects in Birmingham, Cadbury’s home town.
The Kraft bid is about Mumbai, about Johannesburg, about Mexico City and about São Paulo. These cities are examples of what Ms Rosenfeld referred to in her native MBA-speak as “high-growth geographies”. They are places full of poor people who are getting richer and might, for the first time, buy a bar of chocolate, and then another.
Related links:
In-depth: Cadbury and Kraft, online feature – FT.com
Why Kraft will overpay for Cadbury – Mean Street, WSJ
Nestle, Hershey face risk of fresh perils - WSJ