Doing Business

Kraft and Cadbury
Last year the U.S. multinational Kraft acquired another major food companies in the world, Britain's Cadbury. The process was hard and it is a hostile takeover.
Although sometimestalk of mergers and acquisitions as a single concept, these are not the same. In our case it is undoubtedly an acquisition. One company absorbs another while maintaining the same identity first. Anacquisition is often controversial for a company (Hubbard 1999). Cadbury was acquired by a hostile takeover bid, a percentage of shareholders do not approve your purchase ,they did not see Kraft as asuitable partner. Kraft had the failure of its merger with Dart Industries, which split in 1986 .(McCann & Gilkey 1990 ) .
The risks of entering a new and unknown market for a given company doessee the acquisition as a way to expand our business without assuming all risks involved in this natural, instead of extending my business into a new country, acquire a company leader in my field inthis country in order to avoid having to compete with it. (Marín & Werner, 2008 ) . The acquisition of Cadbury by Kraft had a clear purpose, positioned as a leader in the food market. )

The datashow that a large number of subsequent acquisitions have disastrous results. (McCann & Gilkey, 1990). Porter (1987) devised a method to study the diversification strategies:
Attractiveness of thesector. Of course in our case the sector is attractive because Kraft is the first in its industry in the U.S. and Cadbury's second in Europe under the Swiss Nestle. The merger is to establish itselfas one of the largest companies world in its sector. For Porter's profitability will depend on the structure of the sector.

The costs of entry. By acquiring a company already established in themarket Kraft was eliminating the risk involved in entering a new market for Cadbury was a company with brand leaders in their sector traditionally in Europe. It is the reason you pay a high price for...