Kraft Foods sealed a friendly deal to buy British candy maker Cadbury for about $19.6 billion (11.9 billion pounds) after frantic last-minute talks broke an impasse over price.
Kraft Chief Executive Officer Irene Rosenfeld had to inject more cash into her bid and drop the number of new shares in the offer to win over Cadbury Chairman Roger Carr and mollify billionaire investor Warren Buffett, the U.S. food company's top shareholder.
The deal would create the world's biggest confectioner, and analysts see little likelihood of a counterbid.
The cash-and-stock agreement, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 840 pence. Shareholders are also set to get a 10p special dividend, bringing it to a total of 850p.
Rosenfeld had prompted the talks by telephoning Carr on Sunday and suggesting a price of 830p. Although Carr insisted on 85Op, they met on Monday morning at the Lanesborough Hotel, Hyde Park, in central London, where she offered 840p.
Carr was firm and had his board's backing to insist on "850p or nothing" so advisers for both companies worked into the night to arrive at the agreed-upon deal.
The final offer marked a 14 percent increase over Kraft's initial bid of 745p and about 11 percent above the value of the offer on Friday. The price tag also is 50 percent above where Cadbury's stock was trading the day before Kraft's initial bid was disclosed in early September.
"Kraft has acquired a great asset at a great price and should be given credit for this," said Sanford C. Bernstein analyst Andrew Wood. "We consider that this is a bargain -- the lowest multiple of any major M&A deal in the global food space in well over a decade.
