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Kraft cuts costs, pursues Cadbury bid

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Kraft cuts costs, pursues Cadbury bid

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Kraft has detailed how it is going to improve productivity and cut costs to boost its financial position as it moves forward with a hostile takeover bid for Britain’s Cadbury.

Kraft will greatly simplify its supply chain to save over 200 million euros a year. It is also reportedly in talks to borrow up to 5.5 billion euros for the Cadbury purchase. Analyst Erin Swanson of Morningstar explained why it wants Cadbury: “The confectionery industry is an attractive industry to be in, given that it offers higher growth and higher margins than other segments in the packaged food space.” Kraft said it will remain “financially disciplined” in its bid for Cadbury; that signalled a realisation the offer may have to sweetened, but made the point that any increase would be moderate.