Cadbury and Kraft shake hands on US$19.4 billion deal

The increased offer is expected to result in an official announcement today (19 January) that the Cadbury board will recommend the deal to shareholders.

In a statement, Cadbury said: 'The boards of Kraft Foods Inc and Cadbury plc confirm that they are finalising the terms of a recommended offer for Cadbury plc. A further announcement will be made shortly.'

Takeover Panel rules call for Kraft to submit its best and final offer for Cadbury by 5pm today (UK time) or walk away.

Although US chocolate maker Hershey could still come in with a bid for Cadbury, a Kraft/Cadbury deal now looks all but done.

The Birmingham-based confectioner has conducted a long campaign of resistance since August last year, when Kraft chief executive Irene Rosenfeld proposed an offer worth.

Although Cadbury has enjoyed a successful 186-year history, intrinsically linked to its UK base, the defence against Kraft's overtures has generally concentrated on the original deal undervaluing the company.

Today's improved bid looks to have paved the way for the UK confectionery business to be absorbed into Kraft's huge international portfolio of more than 60 chocolate, cheese, coffee, biscuits and general food brands.