Kraft censured by the Takeover Panel

LONDON - Kraft, the US food giant, has been criticised by the City's takeover watchdog after it reneged on a promise to reverse the closing of a Cadbury factory.

Cadbury: new owner Kraft wrapped over factory closure
Cadbury: new owner Kraft wrapped over factory closure

The ruling by the Takeover Panel is likely to damage the Kraft brand, which has been under the microscope since its controversial £11.7bn takeover of Cadbury this year.

Kraft had previously pledged to keep the Somerdale factory open during negotiations to buy the chocolate maker. 

However, following its purchase of Cadbury, Kraft announced it would be closing the factory, with the loss of 400 jobs.

The Takeover Panel concluded that the company had failed in its duties. It is the first rebuke of a company from the watchdog in around three years.

The watchdog said: "The executive considers that Kraft should not  have made the statements in the form in which it did, in circumstances where it did not know the details of Cadbury's phased closure of Somerdale, and its investment in plant and machinery to make products for the UK in its new facilities in Poland."

The statement continued: "Without the information, Kraft's belief, no matter how well-intentioned, that it could continue to operate the Sommerddale facility on a commercial basis was, in the opinion of the executive, not a belief which Kraft had a reasonable basis for holding."

Kraft's strategy regarding its £11.7bn  purchase of Cadbury had previously been criticised by the .

The ruling by the watchdog has ramifications for the panel. It had named Peter Kiernan, a Lazard banker who advised on the Cadbury deal, as its next director general. He has now withdrawn his candidacy.


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