ARTICLE SUMMARY: Kraft Foods initiated a buy offer for British candy maker Cadbury. The offer, valued at $17 billion, would give Cadbury shareholders cash and Kraft stock. The offer was rejected on the grounds that it undervalued Cadbury and that Kraft’s strategy was too conservative to capitalize on the full potential Cadbury offers.

QUESTIONS:

1. Defend Kraft’s offer for Cadbury from the standpoint of its mission and core values.
2. What are the different strategies represented by Kraft and Cadbury and on what basis (related to strategy differences) did Cadbury reject Kraft’s offer?
3. Considering strategic portfolio planning (and thinking about Cadbury’s reason for rejecting the bid), why would Kraft want to acquire Cadbury?

SOURCE: M. Carolan, “Cadbury Defends Rejection of Kraft Bid,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB125277260126106081.html)