Kraft snares Cadbury for $19.6 billion.

Kraft snares Cadbury for $19.6 billion. 6:59am EST. 14 minutes ago‎. LONDON (Reuters) - Kraft Foods agreed a deal to buy Cadbury for around 11.9 billion pounds ($19.6 billion), creating the world's top confectioner after frantic last-minute talks broke an impasse over price. Kraft's CEO Irene Rosenfeld had to inject more cash into her bid and drop the number of new Kraft shares in the offer to win over Roger Carr, chairman of the 186-year-old Cadbury and mollify her top shareholder, billionaire investor Warren Buffett. Kraft's cash-and-share acquisition, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 840 pence, with shareholders also set to get a 10p special dividend, bringing it to a total of 850p. The enlarged group will pip privately owned Mars-Wrigley to the title of the world's top sweet maker, bringing under one roof Cadbury's Dairy Milk chocolate and Trident gum and Kraft's Milka, Toblerone and Terry's chocolate brands. Cadbury shares hit a record high of 838 pence in early trade and were up 3.3 percent 834.5p by 1154 GMT (6:54 a.m. EST). "We believe this is a very well-priced, and well-structured, deal from a Kraft perspective and we expect Kraft's shares to open higher this afternoon which could push the value of the offer above 860p," said Panmure Gordon analyst Graham Jones. Kraft shares traded in Frankfurt were up 0.4 percent. The new bid, which won unanimous recommendation from the Cadbury board, consists of 500p of cash and 0.1874 new Kraft shares, compared to Kraft's original offer of 300p cash and 0.2589 new Kraft shares, which valued the shares at 745p in September, when the deal was first proposed. Buffett, who owns a 9.4-percent stake in Kraft, had warned Rosenfeld not to overpay and issue too many new Kraft shares, and Kraft responded on Tuesday by saying it was issuing 265 million new shares compared with its original plan to issue 370 million. "We have great respect for Cadbury's brands, heritage and people. We believe they will thrive as part of Kraft Foods," Rosenfeld said in the offer statement. She increased Kraft's annual cost savings target to at least $675 million by year three, up from $625 million, but made no mention of possible job losses at Cadbury 46,000 global workforce. She told Reuters in an interview that she found additional synergies after speaking to Cadbury's Carr. One leading Cadbury investor, Standard Life Investments , with a just-under-1-percent stake, said it supported the board's decision to recommend the Kraft offer. "We are supportive of the management's decision although the achieved price is slightly light of our stated target," said David Cumming, head of UK equities at Standard Life. COUNTERBID NOT SEEN. Analysts say a counter bid for Cadbury is unlikely. The UK Takeover Panel gave Hershey , the U.S.-based maker of Hershey's Kisses and Reese's peanut butter cups, and Italy's Nutella chocolate spread and Tic-Tac candy maker Ferrero until January 25 to make a firm bid. Cadbury shareholders now have until February 2 to decide whether to accept a deal that values the shares at 13 times the group's estimated earnings before interest, tax, depreciation and amortization in 2009. "Looking at precedent transaction multiples around 15 times, if Kraft can get one of the best consumer staples for 13 times, then good luck to them. It gives Kraft the growth engine they've been craving for years," said analyst Warren Ackerman at brokers Evolution Securities. Kraft said the deal would be accretive to 2011 earnings by around 5 cents on a cash basis and give a mid-teens percentage return on investment, well in excess of Kraft's cost of capital. Cadbury unions have opposed the move fearing big job cuts and UK politicians have also weighed in, with general elections looming, and UK Prime Minister Gordon Brown told a news conference after the deal was announced that he wanted to protect investment and jobs at Cadbury. "The one thing I want to say is this: we are determined that the levels of investment that take place in Cadbury's in the United Kingdom are maintained," he said. Felicity Loudon, a fourth generation member of Cadbury's founding family was appalled that the iconic chocolate maker looked destined to fall to Kraft, and believes that jobs will be lost and that Cadbury chocolate will never taste the same. "I'm horrified, we shouldn't give up. I just think there's a cultural imbalance. For a quintessentially, philanthropic iconic brand to sell out to a plastic cheese company - there's no mix there," she told Reuters.