Britain's top two confectioners, Cadbury Schweppes PLC and Kit Kat-maker Rowntree PLC, have become tempting targets for U.S. and Swiss bidders in what the British have dubbed the candy bar wars.
The bidding and stake-building reflect a trend among consumer companies to go global by acquiring existing, strong brands, which are almost prohibitively expensive to create from scratch, analysts say.The moves also reflect Swiss companies' concerns about the approach of 1992, when the Common Market is to become one barrier-free market of 320 million consumers.
Because Switzerland is not a member, Swiss companies are eager to buy operations within the 12-nation European Community, said Felicity Smith, an analyst with the London investment firm Hoare Govett Ltd.
The candy bar wars also underscore the key roles Cadbury and Rowntree play in the industry and the importance of Britain as a confectionery market.
The two companies rank among the world's largest chocolate-makers, as do the Swiss suitors for Rowntree, Nestle S.A. and Jacobs Suchard S.A.
The American company General Cinema Corp., which said it wants to increase its stake in Cadbury, has interests in movie theaters and soft drink bottling.
In Britain - the third-largest chocolate consuming country in the world after Switzerland and Norway - Cadbury has the largest share of the $3.9 billion chocolate market, or 30 percent, according to the London brokerage firm Henderson Crosthwaite Ltd.
Rowntree comes in a second with 26 percent, and U.S.-based Mars Inc. is third with 24 percent, the firm said.
Cadbury's brands also include Canada Dry soft drinks.
Many Britons are not happy that two of their venerable institutions are being raided by foreigners.
"The fate of the (Rowntree) Yorkie bar has stirred the nation into a fit of patriotism," the Daily Telegraph newspaper said. "The Little English lobby has been in a lather . . . "
Rowntree hasn't made a direct approach to the government about possible intervention, but it is discussing the matter with "one or two people," a Rowntree spokesman said.
In Cadbury's case, General Cinema, which is headquartered in Chestnut Hill, Mass., said last week that it would increase its 17.7 percent stake in the British company, possibly through a tender offer.
London-based Cadbury, whose brands include Peter Paul's Mounds and Almond Joy candy bars, said any involvement or interference from General Cinema would be "unwelcome, and strongly resisted."