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Cadbury, the tempting target

Created:
6 May 2008
Updated:
7 May 2008
Written by:
Nathalie Olof-Ors

The de-merger of Cadbury's American beverages business seemed like a never ending story. But, at last, shares in Cadbury as a stand-alone confectionery group started trading last Friday, posting a 3 per cent gain on the first trading day.

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One hope is that Cadbury will close the gap on more profitable competitors, and chief executive Todd Stitzer has promised to deliver profit margins in the mid-teen margins by 2011. Should the management fail, someone else might be tempted to try, especially as Cadbury owns a set of brands that could tempt the likes of Kraft or Nestle. What's more, Cadbury has been ousted from its number 1 rank in world confectionery by the takeover of Wrigley - the gum manufacturer - by Mars, maker of the eponymous chocolate bar. This might prompt Cadbury to renew merger talks with Hershey, despite a failed attempt last year.

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