The Work

January 19, 2010 1:38 PM

Kraft Sweetens Cadbury Offer Enough to Make a Deal

Posted by Zach Lowe

After four months of rejecting Kraft's advances, Cadbury relented and accepted a bulked up $19.7 billion offer--about $3 billion higher than Kraft's initial bid, according to The New York Times and Bloomberg.

The deal, should it eventually close, would represent a major win for Kraft's cocounsel at Gibson, Dunn & Crutcher and Clifford Chance. The two took the lead on all M&A matters, with Gibson Dunn running the show in the U.S. and Clifford Chance doing the same in the U.K., according to lawyers on the deal. Barbara Becker, the lead Gibson Dunn partner on the deal, did not immediately return messages seeking comment. Neither did Guy Norman and Sarah Jones, the lead Clifford Chance partners on the matter. 

Cadbury turned to its longtime outside counsel at Slaughter and May, where partners Stephen Cooke and Tim Boxell led the firm's team. Cooke and Boxell did not return messages today. Shearman & Sterling provided U.S. counsel to Cadbury, a longtime Shearman client.

The deal creates the world's largest confectionary, and experts generally agree Cadbury got itself a nice deal by pushing Kraft higher and holding out for possible rival offers. Reports indicate that Hershey came the closest to submitting a last-minute bid, but the Pennsylvania-based company opted not to top Kraft's bid. As we've reported before, Hershey had to overcome both legal and financing hurdles before making an offer.

To seal the deal, Kraft upped its offer to nearly $20 billion and raised the amount of cash in the deal so that it comprised 60 percent of the total offer. (Kraft stock comprises the other 40 percent, according to Bloomberg.) Cravath, Swaine & Moore advised Kraft on financing and other matters, according to our prior reporting. 

The most interesting work going forward may go to Kraft's antitrust counsel at Arnold & Porter. This doesn't quite fall under the antitrust umbrella, but officials in the U.K. are already worried that Cadbury's sale to a U.S. company would result in job cuts across the pond, according to the NYT. Cadbury employs about 6,000 people in Great Britain, the NYT reports. 

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