Kraft Sells Pizza Unit To Nestle For $3.7B

This morning, Kraft Foods announced a definitive agreement to sell the assets of its North American pizza business to Nestle for a total consideration of US$3.7 billion.
Following this news, Kraft Foods is now announcing it will use an amount equivalent to the full net proceeds from the sale (less taxes and deleveraging to maintain its investment grade credit rating) to fund a partial cash alternative (the "Partial Cash Alternative") as part of its Offer for Cadbury plc.
Kraft Foods is doing this because of the desire expressed by some Cadbury Securityholders to have a greater proportion of the Offer in cash and because Kraft Foods Shareholders have expressed a desire for Kraft Foods to be more sparing in its use of undervalued Kraft Foods Shares as currency for the Offer.
Kraft Foods continues to believe that its share price is depressed as a consequence of a number of short term factors which it believes will dissipate once the uncertainty surrounding its Offer for Cadbury is resolved. Therefore, it will apply an amount equivalent to the net proceeds from the pizza sale, estimated to be 60 pence per Cadbury Share or 240 pence per Cadbury ADS, to fund a Partial Cash Alternative to its Offer to acquire Cadbury. Kraft Foods will announce the detailed terms of the Partial Cash Alternative on or before 19 January 2010 (being the last day for Kraft Foods to amend the terms of the Offer).
Cadbury Securityholders who accept the Offer and elect to receive the Partial Cash Alternative will be able to receive an additional 60 pence per Cadbury Share or an additional 240 pence per Cadbury ADS in cash in place of some of the New Kraft Foods Shares they would have otherwise been entitled to receive under the Offer.
The price at which Cadbury Securityholders will be able to substitute cash for New Kraft Foods Shares under this Partial Cash Alternative will be the market price, in pounds sterling at the then current exchange rate, of a Kraft Foods Share at the close of business on the day before Kraft Foods announces the detailed terms of the Partial Cash Alternative.
Until the detailed terms of the Partial Cash Alternative are announced, the Offer remains unchanged. Once the terms of the Partial Cash Alternative are set, its value may be more or less than that of the basic terms of the Offer depending on the prevailing market price of a Kraft Foods Share and the US dollar/pounds sterling exchange rate.
Cadbury Securityholders who believe they might want to receive the Partial Cash Alternative should wait for the publication and/or filing, as applicable, of the revised offer documentation. This documentation will be published and/or filed, as applicable, on or before 19 January 2010.

Lazard & Co., Limited, Centerview Partners UK LLP (Robert Pruzan), Citigroup Global Markets Limited (Leon Kalvaria) and Deutsche Bank AG, London Branch (Nigel Meek), Kraft Food's financial advisors, are satisfied that sufficient resources are available to Kraft Foods to satisfy in full the cash consideration payable as a result of full acceptance of the Offer.