From the TUC

Cadbury deal shows little or nothing has been learned

20 Jan 2010, by Guest in Pensions & Investment

The Cadbury/Kraft deal repeats all the same mistakes that generated the downsides of the last twenty years:

1. It’s a deal done to enrich shareholders rather than for the benefits of the company;

2. It’s a deal recommended to shareholders by people with a massive vested interest in the deal going ahead (notably the Board and a mass of consultants);

3. It’s a deal that relies heavily on borrowed money to fund the buyout;

4. It’s a deal that allows the supposedly free operation of the market and its benefits to trump other issues such as national identity, job security, and quality of produce even though we know that the mergers and acquisitions have a poor record of improving company performance;

5. And it’s a deal which goes through because it is largely supported by short-term investors after a quick buck than those with a long-term interest in the company.

Maximum discomfort now needs to be felt by Kraft and by those who will benefit from this deal. Only through public and media pressure might we be able to stop another era of pointless and damaging mergers and acquisitions.

The vested interest that drive this activity deserves to be as big a scandal as the bank bonuses.

3 Responses to Cadbury deal shows little or nothing has been learned

  1. Tweets that mention Cadbury deal shows little or nothing has been learned | ToUChstone blog: A public policy blog from the TUC — Topsy.com
    Jan 20th 2010, 10:08 am

    […] This post was mentioned on Twitter by Matthew McGregor, ToUChstone blog. ToUChstone blog said: Cadbury deal shows little or nothing has been learned http://bit.ly/50xYav […]

  2. The Government Needs to Learn the Lessons of Private Equity, Fast. | ToUChstone blog: A public policy blog from the TUC
    Feb 22nd 2010, 9:31 pm

    […] Kraft takeover of Cadbury has shown that the large leveraged buyout is far from dead. Indeed we may be about to see yet […]

  3. Liberal Conspiracy » When will this government learn the lessons of Private Equity?
    Feb 23rd 2010, 3:21 pm

    […] Kraft takeover of Cadbury has shown that the large leveraged buyout is far from dead. Indeed we may be about to see yet […]