And so comes the post-mortem. With the Cadbury board's recommendation to accept Kraft's revised offer, another venerable British institution is in the hands of foreign owners. Some see this as yet another indication of the country going—or gone—to the dogs. A symbol of how a once-proud empire has crumbled, unable to keep hold of the few successful companies it produces. And once all the family silver has been sold, what then? Will inward investment to the UK dry up? And what of job security when all our major employers are dancing to the tune of overseas headquarters?

Others see the deal as a bright start to a new decade. It's a positive sign that the UK can create globally powerful companies (even if this one was under an American CEO) and a sign that despite the recent recession, the UK economy remains attractive to overseas investors. These are often the same optimists who are confident the worst of the recession is over.

Sensible opinion probably falls somewhere in between. It's sad that Cadbury—maker of so much iconic British confectionary—is in American hands. But it's not hard to see that once the offer reached almost £12bn, Cadbury's management team had to do their duty to shareholders and accept it. It doesn't make it any easier to swallow knowing that the deal is being financed in part through a £630m loan from RBS, currently majority-owned by the British taxpayer.

That Kraft investor Warren Buffet is evidently hopping mad about the deal is a sure sign it is a good deal for most Cadbury shareholders. But the deal is not without its detractors on this side of the pond and while there will be worries about jobs among Cadbury staff, there are other, potentially larger concerns. The fact is that huge corporate takeovers and mergers rarely achieve their objectives.

As Richard Lambert, director-general of the CBI, warned earlier this week, "We know for a fact that most acquisitions don't deliver what the bidders hope from them". He particularly warned businesses from getting carried away with the idea that we've hit the recovery and that it's time to get spending. "There will be quite a mood in the air that says, 'let's start thinking about acquisitions again'," he said.

So will the combined Kraft-Cadbury outfit be better than the sum of its parts? There is a huge cultural gap between the two businesses as well as what analysts like to call "operational overlaps". Those "overlaps" are where the efficiencies, cost savings and job losses are found. The higher the price a bidder has to pay for a takeover target, the greater such efficiency savings need to be. Despite empty assurances to protect British jobs at Cadbury, there are bound to be some casualties when the two firms are merged. 

One thing is for sure: despite pledges to keep the Cadbury/Bournville social and philanthropic tradition alive, and irrespective of any Kraft promises to keep UK factories open, should things start to go wrong for the combined outfit, in the manner of so many of these giant takeovers, the axe will sooner or later be felt in the UK.

Richard Cree

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