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February 16, 2010

CAGNY: Kraft details Cadbury integration timetable

Kraft Foods today (16 February) publicly provided an initial timetable for the integration of Cadbury's operations into its global business.

Kraft Foods today (16 February) publicly provided an initial timetable for the integration of Cadbury’s operations into its global business.

Following Kraft’s GBP11.5bn (US$18.2bn) acquisition of Cadbury, the US food giant’s plans to merge the extensive manufacturing and distribution operations of the two behemoths has come under considerable scrutiny.

Investors have voiced concerns over Kraft’s ability to drive profitable expansion and deliver promised margin growth.

Addressing the CAGNY investor conference today (15 February), Kraft finance chief Tim McLevish outlined the group’s integration plans for the next six months.

While McLevish said that the enlarged company would be unified under the umbrella of Kraft’s back-end operations, he added that “front-room” activities would reflect best practice at either company.

In terms appointments, he insisted that the company would draw on the both Kraft and Cadbury’s talent pool and identify “the best people for the role”.

Within the first 45 days of the acquisition, McLevish said that Kraft would announce its executive team, country and category leaders.

Within the first 90 days Kraft will have announced the next level of regional management and any plans to consolidate office and R&D functions.

Six months from completing the acquisition, Kraft said that it would have formalised all decisions regarding the efforts to combine the Kraft-Cadbury manufacturing network.

Commenting on the group’s acquisition of Cadbury, Kraft CEO Irene Rosenfeld said that she was “feeling awfully good” about the company’s expanded portfolio and geographic footprint.

However, she stopped short of ruling out further divestitures as the company digests the mammoth acquisition. 

“We will cont to look at our portfolio, as we always do. But I feel quite comfortable with the portfolio as it stands today and our ability to meet our financial commitments,” she said.

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