The combined company will have about $50 billion
in annual sales, with Cadbury adding Trident gum and Creme Eggs to Kraft's Velveeta processed cheese, Oreo cookies, Toblerone chocolate and Tang drinks and will command about 15% of the world's
confectionery market. It will still trail Mars in the candy segment, however.
"Together we will be a global leader in the confectionery category and we'll have leading market
shares in many countries," Rosenfeld told investors in a conference call followed by Ad Age's Emily Bryson York. "This is important
because we believe scale will be an increasing source of competitive advantage in both the confectionery category and the food industry as a whole."
advertisement
advertisement
Kraft's focus will be on
"growth categories," Rosenfeld says, and it is looking to expand its international footprint by making use of Cadbury's international distribution channels to penetrate growing markets such as Brazil,
India, Russia and China. "Kraft Foods is strong in modern retail channels, that is, traditional grocery stores," Rosenfeld points out. "At the same time, Cadbury is very strong in instant-consumption
channels."
In a roundup of reactions to the deal, USA Today's David Lieberman and Matt Krantz find a chorus of skeptics, but also those who applaud the deal, as well as the requisite "let's-wait-and-see" types. "My worry is they ruin [Cadbury]," says D.A. Davidson analyst Timothy Ramey, who cut his rating on Kraft to "hold" from "buy." But Standard & Poor's analyst Tom Graves doesn't see the price as too onerous, as Warren Buffett warned it might be earlier, but says that it now has to put execution where it mouth has been.