Kraft gives up Cadbury operations in Romania and Poland at EC request

The European Commission authorised American group Kraft Foods to buy British company Cadbury. On one condition: the new entity must give up Cadbury chocolate producing operations in Romania and Poland, Romanian news agency Mediafax informs.

The Competition European Commissioner Neelie Kroes said she was satisfied by the conditions imposed on the transaction, indicating that Kraft’s overtaking Cadbury will not have a negative impact on competition and consumers in the European Union.

„Taking into consideration the proposed collective measures, the Commission concluded that the transaction would not reduce competition significantly in the European Economic Space or in any of its other parts”, an EC report read on Wednesday evening, January 6 2010.

Both Kraft and Cadbury represent two important brands on the European chocolate products market. Kraft launched a public offer worth over 10 billion pounds to buy Cadbury, but the British company rejected the offer and its share holders don’t seemed to be impressed by the American group offer.

Still, the European Commission underlined competition issues on the chocolate product market in Poland and Romania, two countries where the market quotas of these two companies are extremely high and the two brands are tough direct competitors.

To solve these issues, Kraft engaged to cession the Cadbury activities regarding the production of sweets under the Wedel brand on the Polish market and the Cadbury activities addressing the production of chocolate products in Romania.

Cadbury bought in June 2007, through the Vantas International fund, 93,2% of the Kandia-Excelent titles in Bucharest, company listed with the Bucharest Stock Exchange, from Axis Investments and Meinl Bank, paying almost 100 million euros. Later, the group bought the minor participations and took the company off the stock exchange list in May 2008.