Cadbury goes in £11.5bn deal

Cadbury was today effectively swallowed up by US food giant Kraft after the two companies struck a deal worth up to £11.5 billion.

Hours of talks overnight ended in an agreement, marking the end of a bitter battle to keep the Birmingham chocolate maker independent and British.

Kraft, which make brands including Dairylea and Oreos, had until midnight to raise its bid for Cadbury, which now amounts to 850p a share.

Cadbury's board has unanimously recommended its shareholders accept the new offer.

Shares in the Birmingham-based Dairy Milk-maker rose sharply today on news of the deal, up in early trading by 29.5p to 837p.

Kraft boss Irene Rosenfeld moved to reassure those worried about the implications for the company, which employs 2,500 in the West Midlands. She said: "We have great respect for Cadbury's brands, heritage and people. We believe they will thrive as part of Kraft Foods."

Reacting to the news, Prime Minister Gordon Brown said today: "We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure."

But today Cadbury chairman Roger Carr, who had dismissed earlier Kraft offers as "derisory", said: "We believe the offer represents good value for shareholders and are pleased with the commitment that Kraft has made to our heritage, values and people throughout the world."

Richard Burden, Labour MP for Birmingham Northfield, said: "I am really very, very concerned. I am still concerned that a successful Kraft bid would put short term profit before the long term interests of the company, its employees and the region."