Cadbury PLC (NYSE: CBY) announced Tuesday that it has agreed to an increased takeover offer by Kraft (NYSE: KFT) worth 11.5 billion pounds ($19.5 billion), according to Associated Press.
The news has caused a huge stir amongst British regulators and lawmakers as they scramble to speculate on how Kraft’s American influence can affect the British chocolate maker.
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The deal, comprising 500 pence cash and 0.1874 new Kraft shares for each Cadbury share, is a 9 percent premium to its previous 770 pence offer and 50 percent higher than Cadbury's market value before Kraft went public with its approach in September.
Cadbury stock was trading just under that level, at 836.5 pence, up 3.6 percent, in Tuesday afternoon trade. Shares in Kraft were down 2.5 percent at $28.85.
The combination of the pair would create the world's biggest confectionary company, replacing Mars Inc., which bought William Wrigley Jr. Co. in 2008 for $23 billion.
The deal between Kraft and Cadbury will create a portfolio with more than 40 confectionary brands, each with annual sales in excess of $100 million.
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