Job cuts ‘inevitable’ at Cadbury

A day after the UK chocolate-maker Cadbury accepted Kraft Food’s improved £12bn offer, its chairman

The Kraft management has given no concrete reassurances until now over the future of the Cadbury's UK employees. Instead, it has said the takeover offers a potential for "substantial further cost savings."

The American company's bid is to be largely funded by debt. Kraft will reportedly be borrowing £7bn to finance the deal.

Jennie Formby, Unite's national officer for food and drink, said that the only way the company can pay off this huge debt is to reduce costs drastically, giving rise to fears of layoffs. She called the takeover "a very sad day for UK manufacturing."

Meanwhile, Gordon Brown has committed himself to protecting British jobs at Cadbury which employs 4,500 people in the UK. He said he is determined to ensure that the levels of investments in Cadbury in the country are maintained and the British jobs remain secure.

The deal has attracted flak from some of Cadbury's shareholders.

Legal & General, the biggest UK shareholder, said it was "disappointed" because the increased bid price did not fully reflect the long-term value of the "iconic and unique" British confectioner. A senior official of another shareholder, Neptune Investment Management, was reported as calling the takeover "bad for everyone."

There is anger among members of the Cadbury family too. Felicity London, a descendant of Cadbury's founder, was quoted in the Independent as calling the deal a "horror story."

Kraft's acquisition of Cadbury offered a bonanza for City advisers such as lawyers, bankers and accountants who reportedly stand to make a whopping £250m in fees from the two companies. This comes to over £2m a day for the 100 days that the takeover battle lasted.

Cadbury yesterday decided to recommend to its shareholders that they should accept Kraft's improved bid of 850p a share. The shareholders have until 2 February to decide about the offer.