AGENDA

• Kraft + Cadbury ( A Strategic Fit).

• Recommended Offer: Structure & Economics.
• Conclusion.

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 KRAFT FOODS OVERVIEW

NYSE: KFT
• Ranking :World’s second largest food company
after nestle .
• Brands available in 150 countries.
• Headquarter: Chicago, Illinois.
• Employees Approximately 100,000
• 2008 Revenues $42 Billion.
• The firm has two main operating units-Kraft Foods
North America and Kraft Foods International
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 KEY BRANDS

• Of its brands, more than 40 are at

least 100 years old, nine brands
have revenue exceeding $1 billion
and more than 50 additional brands
have revenues greater than $100
million.
• The company holds the top global
position in 11 product categories:
• coffee, cookies, crackers, cream
cheese, dessert mixes, dry packaged
dinners, lunch combinations,
powdered soft drinks, process
cheese, salad dressings, and snack
nuts.

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 SHAREHOLDERS

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 FINANCIALS

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 KRAFT: Major Priorities (long term strategy)

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07/12/21 7
 CADBURY PLC OVERVIEW

• Ranking: one of the world's largest confectionery companies

with No. 1 or No. 2 positions in more than 20 of the world's 50
biggest confectionery markets.

• The largest and most broadly spread emerging markets

business of any confectionery company.
• Employees: 48,000.
• 2008 Revenues:$9 Billion

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 KEY BRANDS

• direct operations in more than 60

countries.

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 How we stack up
CADBURY KRAFT

SIZE 2nd largest confectionery co after World’s 2nd largest food

mars -wrigley group, after nestle.
BRANDS AND Dairy milk and roses chocolates, Oscar mayer hot dogs,
PRODUCTS trident gum and halls cough drops. maxwell house instant
coffee, milka, toblerone and
tang.

REVENUE IN 2008 $8.8 billion $42 billion

EMPLOYEES 46000 98000
FOUNDED IN 1824 1903

HQ Uxbridge , london Northfeild , illinois

CEO Todd stitzer Irene rosenfeld

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 STRATEGIC RATIONALE
(KRAFT + CADBURY)

• Geographic break down by 2008 revenues

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 TRANSACTION WOULD CREATE

• A company with approximately $50 billion in revenues.

• A global powerhouse in snacks, confectionery and quick meals;

• A geographically diversified combined business, ( including

developing markets like India, Mexico, Brazil, China and
Russia).

• A strong presence in instant consumption channels in both

developed and developing markets.

• The potential for meaningful revenue synergies over time from

investments in distribution, marketing and product development.

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 COMBINED COMPANY WILL PRESERVE CADBURY’S
PROUD HERITAGE AND TRADITION

• m

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 TRANSACTION DELIVERS VALUE
FOR KRAFT SHAREHOLDERS

• m

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• m

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• m

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• m

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• m

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• m

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• m

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 SYNERGIES AND COST
SAVINGS
• Potential for meaningful revenue synergies
- Highly complimentary geographic footprint
- Enhanced distribution, marketing and product development
• Additional annual cost savings of $675 million
- Pre tax annual cost saving identified as
300 million in operational synergies
250 million in general and administrative synergy
125 million in marketing and selling synergy
- Performance improvement programs at Kraft and Cadbury
- One off implementation cost of $1.3 dollars
Our ability to successfully
integrate
Long term targets and near term
benefits
 SUMMARY

The final offer marked a 14% increase from our initial offer.
Will create the worlds largest confectioner.

Recommended offer represents an attractive offer for Cadbury share holders

- Combination of cash and upside as continuing share holders
- Transforms the portfolio and enhances the long term growth prospects

Generates a strong near term economic return

- 5% increase in EPS in 2011
- 9%-11% increase in long term
- Access to an iconic brand with a strong penetration in growth markets
- Access to a strong marketing and distribution channel in developing market
 RISK ANALYSIS

- Over exposed to large low growth developed market

- A range of products and categories that have competition from
various other private companies
- Unfocused Business model
- Continued weak economic environment
- Global chocolate consumption has fallen by 2%
- Integration of business
- Higher cocoa prices may pressure chocolate companies to make
acquisitions
- Issuance of debt causing our rating to lower