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Kraft Group (Part I): Cadbury Acquisition—Purchase Accounting

In: Financial Analysis of Mergers and Acquisitions

Author

Listed:
  • Eli Amir

    (Tel Aviv University)

  • Marco Ghitti

    (SKEMA Business School)

Abstract

In February 2010, Kraft Foods, a US publicly listed company, announced it had acquired control of Cadbury, a leading confectionery company listed on the London Stock Exchange. The merger between the two companies created the second largest confectionery, food, and beverage company in the world. The purpose of this case is to introduce the reader to the basic elements of consolidation using the purchase method. Using financial information from both companies, we measure the deal consideration, the fair value of net assets acquired and goodwill; then, we produce a pro-forma consolidated balance sheet. We also discuss the differences between the full fair value and partial methods for goodwill and non-controlling interests and the effects of fair value adjustments on subsequent consolidated income.

Suggested Citation

  • Eli Amir & Marco Ghitti, 2020. "Kraft Group (Part I): Cadbury Acquisition—Purchase Accounting," Springer Books, in: Financial Analysis of Mergers and Acquisitions, chapter 0, pages 193-201, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-61769-1_10
    DOI: 10.1007/978-3-030-61769-1_10
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