A British institution swallowed whole

After 186 years, independence is lost as Kraft's takeover of the UK's best-known chocolate maker marks the end of an era.

Workers cross a road to attend a union campaign launch at the Cadbury factory in Bournville, central England, December 15, 2009. The Unite Union and Cadbury workers today launched a campaign to protect their company's independence and fend off a hostile bid by Kraft. Kraft Foods has vowed to maintain discipline in its pursuit of British chocolatier Cadbury, suggesting the U.S. group will resist raising the price of its hostile bid.      REUTERS/Darren Staples (BRITAIN - Tags: BUSINESS FOOD) *** Local Caption ***  DST04_CADBURY-KRAFT_1215_11.JPG

The big question now is: how will the Kraft board members choose to eat their Cadbury Creme Eggs? After weeks of bittersweet talks, the US food giant appears to have finally snapped up the UK chocolate maker after the Cadbury board agreed to an £11.9 billion (Dh71.57bn) deal.

By increasing the offer from £10.5bn, Kraft has created the biggest confectionery company in the world and bought household brands such as Creme Eggs, Dairy Milk, Cadbury's Flake and the Crunchie bar. Kraft has also purchased a savvy promotional team that dreamt up the popular television advertising campaign "How Do You Eat Your Cadbury's Creme Eggs?". With understated British humour, the company, based in Bournville in the UK, has peddled chocolate bars around the world, creating a global brand.

More than 250 million Dairy Milk bars are sold every year across 33 countries. Yet this is all a far cry from the company's humble beginnings in 1824 when John Cadbury opened a grocery store in Birmingham. A Quaker, Mr Cadbury believed cocoa and drinking chocolate were healthy alternatives to alcohol, which at the time was considered to be adding to the miseries of the impoverished working classes.

In 1905, the Dairy Milk bar was launched as a challenge to dominant Swiss chocolate makers and the rest, as they say, is history. "We have great respect for Cadbury's brands, heritage and people," said Irene Rosenfield, the chief executive of Kraft. "We believe they will thrive as part of Kraft Foods." Time will tell. What is certain is that the US giant appears to have stolen a march on the rival confectionery companies Hershey and Ferrero, which are still considering their options.

They have until January 25 to make offers. "This looks like a deal," said Jon Cox, an analyst at Kepler Capital Markets in Zurich. "It's hard to believe anybody can come in and break up the party." If the deal goes through, as looks likely, almost one third of the confectionery market will be split equally between Kraft and its US rival Mars, leaving Ferrero, Hershey and even Nestle, the Swiss juggernaut, with some tricky decisions to make as they are dragged into a chocolate war.