Sixty fund managers under short-term pressures sealed the fate of Cadbury’s £11.7 billion takeover by Kraft, sending “180 years of history down the tube”, a new book reveals.
Sir Dominic Cadbury, a former chief executive and chairman of Birmingham's world-famous confectionery group, says thousands of Cadbury shareholders did not want to sell out to Kraft, but were powerless to prevent the takeover.
The industrial knight, great-grandson of chocolate dynasty founder John Cadbury, says in the book Chocolate Wars by Deborah Cadbury: “It comes back to the role of the shareholder – the shareholder is the owner of the business.
“But the difficulty with all this is that they are not acting as owners of the business. There are thousands of shareholders in Cadbury who probably did not want to sell their shares to Kraft.
“But they didn’t have a vote, because if you are the average shareholder, you don’t hold your shares personally, but through your pension scheme or your bank. In the case of Cadbury, sixty fund managers made the decision.”
Author Ms Cadbury, a descendant of the famous chocolate entrepreneurs, says that fund managers were “under pressure to deliver short-term performance targets, rather than to focus on long-term wealth creation”.
The book also reveals that Roger Carr, chairman of Cadbury at the time of the takeover, was left feeling “sad and hollow” by the Kraft takeover while chief executive Todd Stitzer said he felt “unspeakably sad.”
Sir Dominic said: “One day you had the Cadbury company, the next day you didn’t. Gone. One hundred and eighty years of history down the tube, and I would argue 180 years of being a beacon of good practice. Something very precious got lost that day.”
Deborah Cadbury concludes: “It is hard not to believe that something irreplaceable... has been discarded as effortlessly as a sweet wrapper.”
* Chocolate Wars – From Cadbury to Kraft: 200 Years of Sweet Success and Bitter Rivalry by Deborah Cadbury is published by Harper Press, priced £20.