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Kraft Foods bags Cadbury for £11.9 billion

As we covered early today, Kraft Foods and Cadbury have announced details of a recommended offer for the UK giant which values the company at around £11.9 billion. The deal is a mixture of shares and cash with five pounds and 0.1874 Kraft Foods shares for each Cadbury share. This values the company's shares at £8.40 per share but there will also be a special 10p dividend on top of this, bringing the total value to £8.50.

Even though Cadbury yesterday suggested the shares could be worth in excess of £10 by 2013 the company has today admitted that the recommended offer from Kraft Foods does in fact offer "good value". There is no doubt that negotiations have been ongoing overnight and the comments in the press over the last few days have purely and simply seen the two companies jockeying for position and looking to get the best deal for their shareholders.

Since day one it has been widely appreciated that Kraft Foods and Cadbury offer perhaps the best mix of any two companies mentioned in relation to the Cadbury saga. There is very little overlap in each other's markets offering the potential to invest into and expand a business which will have a louder voice on the worldwide stage.

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