Friday 30 September 2016

Investor takes €5bn slice of Cadbury maker

Martinne Geller

Published 07/08/2015 | 02:30

Mondelez International, maker of Cadbury chocolate
Mondelez International, maker of Cadbury chocolate

Activist investor William Ackman has built a stake worth about $5.5 billion (€5bn) in Mondelez International, the maker of Cadbury chocolate and Oreo cookies, in what is seen as an attempt to push the company to boost earnings or sell itself.

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Mondelez has already taken steps to boost its operational performance, including shutting factories and shedding businesses. The company has also set a share buyback of up to $13.7bn. But analysts said Ackman probably wants more.

"We suspect Mr Ackman's primary goal is to have Mondelez sold," JP Morgan analyst Ken Goldman wrote in a note.

A slowdown in growth for the global packaged food sector has sparked a wave of consolidation as companies try to cut costs, boost efficiency and gain scale.

However, Mondelez's shares - which initially jumped on news that Ackman's Pershing Square Capital would become the company's biggest shareholder - were up less than 1pc in early trading amid doubts about whether a buyer could be found.

At the current share price of around $46.40, Mondelez is valued at about $80bn.

Irish Independent

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