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| Kraft's Cadbury takeover may put 30K jobs at risk: Unite |
| Press Trust of India / London Jan 14, 2010, 20:28 IST |
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Britain's largest workers union Unite has warned that some 30,000 jobs would be put at risk if US-based Kraft Foods takes over Cadbury and the UK confectioner would be saddled with a 22 billion pound debt.
"A colossal 22 billion pound worth of debt will swamp Cadbury and could put at risk some 30,000 jobs, including around 7,000 jobs at Cadbury itself, if Kraft's bid for the confectionery company wins through," Unite said.
The union briefed all Cadbury investors yesterday, asking them to put wider public interest implications of losing Cadbury's independence before the narrow issue of share price.
Cadbury's own performance has been commendable, which has seen the company grow by 6 per cent year-on-year for the past four years, post a 30 per cent increase in its pre-tax profits and its commitment to the ethical trading deepen.
Kraft's need to service its colossal debt puts jobs and investment under serious threat and has led to extensive outsourcing, Unite said in a statement.
Between 2004 and 2008 alone, Kraft shed 19,000 jobs and closed 35 sites to help pay down its debt, which has since grown to an estimated 22 billion pound, it added.
Moreover, Kraft ownership could see control of Cadbury move from the UK to Illinois in US, in the process putting at risk 7,000 direct jobs and at least 20,000 more in the wider supply chain.
Unite also warned that the Cadbury brand would be damaged if it is included in Kraft's disparate portfolio, which stretches from processed cheese to groceries.
Unite national officer for food and drink, Jennie Formby said, "Cadbury has clearly demonstrated its strength as a standalone company. Contrast that with Kraft's excessive debt, under-performance and the unacceptable risks this brings for Cadbury and it is hard to see any wisdom in this bid whatsoever."
"We have given Kraft repeated opportunities to provide assurances on jobs and investment but on every occasion the company has declined to do so, adding to concerns that Cadbury workers and their communities are not a priority," Formby added.
Kraft has made an over $10 billion takeover bid for Cadbury, which has been rejected by the confectioner.
The American firm's original offer for Cadbury was 300 pence and 0.26 Kraft shares for every Cadbury stock, The offer was rejected by Cadbury.
Last week, Kraft said it would raise the cash component of the bid by 60 pence.
Cadbury again rebuffed Kraft's "derisory" takeover offer, citing "outstanding" financial performance in 2009 and reiterated that shareholder value will be maximised if it remains an independent entity.
Kraft's takeover plan has also been opposed by the US-based firm's top shareholder -- Warren Buffett-led Berkshire Hathaway.
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