Kraft to face investigation into Cadbury takeover terms

Kraft Foods is reportedly being investigated by British regulators on whether the company misled employees and investors in its bid to take over Cadbury.

Reports suggest that the US food giant is being investigated over the terms of its agreement to buy Cadbury, which were formalised in January in a deal worth about £12.1bn.

The Panel on Takeovers and Mergers is said to be looking into comments Kraft executives made during the takeover battle about Cadbury’s Somerdale candy factory near Bristol. Kraft officials had said the factory would be kept open in the initial takeover letter.

The pledge was made despite Cadbury saying it would close the plant and move the jobs to Poland. After the takeover was completed in February, Kraft then said it decided to accept that the Somerdale plant would be shut by 2011.

Kraft executives are now due to be called later in March to give evidence in front of a parliamentary committee that is holding hearings on the takeover.

Last week, Cadbury’s UK managing director Trevor Bond was handed a new role as president of Kraft Foods Europe, as the US food company begins to integrate the two businesses.

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