Family-owned Ferrero, the Italy-based chocolate maker, has decided not to proceed with a bid for UK confectionary company Cadbury, according to media reports this morning.
The decision was made by Michele Ferrero, the group's chairman and family patriarch, people familiar with the situation told the Financial Times. It is understood Michele Ferrero believed going forward with the bid would create too much debt for the company.
When Ferrero first announced it was "in the preliminary stages of evaluating its options in respect of Cadbury" in November 2009, speculation was rife that the family was divided over the move. When www.campdenFB.com contacted Ferrero, the company refused to comment on this speculation. (Click here to read our coverage of the story)
A bid for Cadbury would mark a departure for Ferrero from the business strategy it has previously followed – moving from internally driven growth to growth by acquisitions – and it is understood Michele Ferrero was against this change. However, his sons Pietro and Giovanni, who jointly hold the managing director role, were reportedly more eager to get involved with Cadbury.
Today's news comes as Cadbury attempts to prepare its final defence against a £10.3 billion hostile takeover bid from US-based Kraft Foods Inc. (Click here to read our coverage of the takeover bid and the families behind it)
Ferrero is the world's fourth-largest chocolate maker with 2008 revenues of €6.2 billion. Its products include Nutella, Kinder Surprise and Ferrero Rocher chocolates.
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