The move, that Kraft said would create ‘a global powerhouse in snacks, confectionery and quick meals' valued Cadbury at 745 pence per share, a 31% premium based on Friday's closing prices.
The merged company would have global revenues in excess of $50bn and create savings of $625m annually.
Irene B. Rosenfeld, chairman and chief executive of Kraft Foods, said: ‘This proposed combination is about growth. We are eager to build upon Cadbury's iconic brands and strong British heritage through increased investment and innovation.
‘We have great respect and admiration for Cadbury, its employees, its leadership and its proud heritage. As we have done, Cadbury has built wonderful brands by focusing on quality, innovation and marketing, but we believe the next stage in Cadbury's development will be challenging, given the increased importance of scale in the industry,' she added.
In September last year, Saatchi & Saatchi Fallon (SSF) group took over the £100m Cadbury business from Publicis.
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