Kraft bosses to be grilled by Parliament
15 February 2010 6:18am
SENIOR executives from Kraft will be grilled by a Select Committee about the US firm’s controversial Cadbury takeover.
The hearing, which has not yet been finalised, will try to pin Kraft down on its plans for the 186-year-old confectioner.
Kraft received criticism from business secretary Lord Mandelson last week after it announced it will not reverse an earlier Cadbury decision to close Somerdale factory in Keynsham. It had stating during the bidding process it hoped to keep the plant open. Over 400 jobs will be lost as production is moved to Poland.
Business Select Committee chairman Peter Luff told City A.M.: “The biggest question we need to ask is what Kraft’s plans are for the UK.
“I want to get Kraft on the record in front of the British public and find out what the implications are for the future of the business, for it’s workers and for its suppliers.
“I want to look at what the government’s relationship with Kraft was like in the lead-up to the bid. We’ve been told that certain assurances about the future of the company were made – I’d like to find out what these were.
“I think we need to decide what view we take when a British manufacturer is overtaken by a foreign company in such a highly leveraged bid.
“I fully accept that Britain benefits from its free market economy but I think there are serious questions to be asked about the nature of the Kraft bid and what the implications are for Cadbury.
“We are still discussing who will attend from Kraft. Unfortunately we have no powers to summon the chief executive, as much as we’d like to see her, but we will be suggesting Kraft sends very senior management.
“How Kraft is treated depends on how it responds to the questions.”
Kraft acquired Cadbury on 2 February after a drawn-out skirmish with shareholders. Cadbury failed to secure an eleventh hour “white knight” rival bid from US confectioner Hershey and eventually capitulated to Kraft for 840p a share. Despite the board recommending this price, some shareholders had hoped to hold out for as much as 900p a share.
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