Kraft Foods Sells Pizza Business, Focuses on Global Expansion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Kraft Foods Incorporated (NYSE:KFT) (Northfield, Illinois) announced plans to sell its frozen pizza business to Nestle SA (OTC:NSRGY) (Vevey, Switzerland) for $3.7 billion, leaving the company in a better position to improve its takeover offer of Cadbury plc (NYSE:CBY) (Uxbridge, England). Cadbury rejected Kraft's previous $16.7 billion bid, claiming it undervalued the company, according to some estimates by as much as 43%. Cadbury shareholders want the security of more cash and may be looking for a deal with up to 50% in cash. Kraft plans to release its revised bid on January 16, ahead of the January 19 deadline. The new bid will likely have a higher cash component and a reduced stock portion.

Cadbury is a natural fit for Kraft Foods' plan for global expansion, particularly in emerging markets. Cadbury's chocolate and gum business would give Kraft a global distribution network and would strengthen market share in Latin America and India.

Nestle has purportedly been a rival suitor for Cadbury, but the company has stated that it would not pursue a takeover or merger of the confection maker. In an earlier statement, Nestle CEO Paul Bulcke declared that the company has no plans for any major acquisitions in 2009 and 2010.

Separately, Nestle is selling its 51% stake in leading eye-care products manufacturer, Alcon (NYSE:ACL) to Swiss based drug maker Novartis AG (NYSE:NVS) for $28.1 billion and expects to the transaction to close by the middle of 2010.The sale will enable Nestle's management to concentrate on accelerating the development of Nestle's position as the world's leading nutrition, health and wellness company. For additional information, see January 6, 2010, article - Novartis Shifts Sights to Eye Care Giant Alcon with $50 Billion Buyout Plan.

Industrial Info maintains a database of operational plants owned by Kraft Foods and Nestle in North America. Additionally, IIR is tracking capital and maintenance expenditures at plants owned by both companies.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.