Kraft Foods today offered $7.2 billion for Groupe Danone SA's biscuit unit in a move that will add the latter's Petit Ecolier chocolate biscuits and TUC crackers to Kraft's Oreo and Ritz brands.
"Kraft wants to become the indisputable leader in the biscuit market," says Alain Crouzat, a fund manager at Montsegur Finance, and they are currently weak in Europe. The purchase will
make it the market leader in France, Italy and Poland.
It also will "serve as a cornerstone to expand to emerging markets," according to Kraft CEO Irene Rosenfeld. The new unit will double
Kraft's sales in China and put the company in Eastern Europe, Russia, Indonesia and Malaysia, she says. Danone, which also bottles Evian water, can now "fully concentrate" on dairy and mineral-water
drinks, according to CEO Franck Riboud.
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