Recommended Final Offer for Cadbury plc

19 January 2010

RECOMMENDED FINAL* OFFER

KRAFT FOODS INC. ("KRAFT FOODS")

for

CADBURY PLC ("CADBURY")

VALUING EACH CADBURY SHARE AT 840 PENCE

SUMMARY

Recommended Final Offer terms

The board of Kraft Foods is pleased to announce the detailed terms of a recommended Final Offer for Cadbury and the board of Cadbury unanimously recommends Cadbury Securityholders to accept the terms of the Final Offer.

Under the terms of the Final Offer, Cadbury Securityholders will be entitled to receive:

for each Cadbury Share		500 pence in cash
		and
		0.1874 New Kraft Foods Shares

for each Cadbury ADS		2,000 pence in cash
		and
		0.7496 New Kraft Foods Shares

representing, in aggregate, 840 pence per Cadbury Share and GBP 33.60 per Cadbury ADS.

In addition, Cadbury Shareholders will be entitled to receive 10 pence per Cadbury share by way of a Special Dividend following the date on which the Final Offer becomes or is declared unconditional.
The terms of the Final Offer reflect the strength of Cadbury's business, its brands and the future potential for growth through the combination of Kraft Foods and Cadbury.

An attractive valuation and substantial long-term value creation potential as part of the Combined Group

Kraft Foods believes that the Final Offer represents a compelling opportunity for Cadbury Securityholders, providing the ability to receive approximately 60 per cent. of their consideration in cash and long-term value creation potential through a continued shareholding in the Combined Group.
The Final Offer represents an attractive multiple of 13.0 times Cadbury's underlying 2009 EBITDA.
Kraft Foods believes a combination with Cadbury will provide the potential for meaningful cost savings and revenue synergies from which Cadbury Securityholders will benefit.

Combination creates a global leader in the global foods and confectionery sector

Kraft Foods believes a combination represents a strong and complementary strategic fit, creating a global confectionery leader with a portfolio of more than 40 confectionery brands each with annual sales in excess of USD 100 million.
Kraft Foods and Cadbury have a highly complementary geographic footprint, providing the Combined Group with a leading presence in attractive global markets.
The Combined Group will have a leading position in developing markets, including in Brazil, Russia, India, China, and Mexico.
The Combined Group will benefit from important additional scale in the consolidating confectionery segments.
The Combined Group will have best-in-class infrastructure in both traditional and instant consumption routes to market.

Management and employees

The combination will augment the world-class capabilities of both Kraft Foods and Cadbury by employing a "best of both" approach, from sales and marketing to distribution and management.
In particular, Kraft Foods believes that the global business network of the Combined Group will create opportunities for Cadbury employees and managers.
In addition, Kraft Foods has given assurances to Cadbury that, on the Final Offer becoming or being declared wholly unconditional, the existing contractual employment rights, including pension rights, of all employees will be fully safeguarded.

Further details of the Final Offer

Kraft Foods also announces that it reserves the right to, and intends to, reduce the number of acceptances required to fulfil the Acceptance Condition from 90 per cent. to 50 per cent. plus one Cadbury Share on or after 26 January 2010.
The Final Offer does not require the approval of Kraft Foods Shareholders. Accordingly, the condition relating to such approval, as set out in the Original Offer Documents, is treated as satisfied for the purposes of the Final Offer.
Full acceptance of the Final Offer will result in the issue of 265 million New Kraft Foods Shares, representing approximately 18 per cent. of the existing issued share capital and 15 per cent. of the enlarged issued share capital of Kraft Foods.

Commenting on the Offer, Irene Rosenfeld, Chairman and CEO of Kraft Foods, said:

"We have great respect for Cadbury's brands, heritage and people. We believe they will thrive as part of Kraft Foods. This recommended offer represents a compelling opportunity for Cadbury Shareholders, providing both immediate value certainty and upside potential in the combined company. For Kraft Foods Shareholders it transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline."

Commenting on the Offer, Roger Carr, Chairman of Cadbury, said:

"We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft Foods has made to our heritage, values and people throughout the world. We will now work with the Kraft Foods' management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees."

Cadbury Securityholders who have previously accepted the Original Offer (and have not withdrawn those acceptances) will automatically be deemed to have accepted the terms of the Final Offer by virtue of their prior acceptances and therefore need take no further action.

Other Cadbury Securityholders who wish to accept the recommended Final Offer must take action to accept the Final Offer by 1.00 pm (London time) / 8.00 am (New York City time) on 2 February 2010. Details of the procedure for doing so will be set out in the Final Offer Documents (and, in the case of certificated Cadbury Shares and Cadbury ADSs, the Final Acceptance Forms) to be sent to Cadbury Securityholders as soon as practicable. The Final Offer Documents will also be available on Kraft Foods' website (www.transactioninfo.com/kraftfoods/).

This summary should be read in conjunction with the full text of the following announcement.

* The Offer is final and will not be increased, except that Kraft Foods reserves the right to increase the Offer if there is an announcement on or after the date hereof of an offer or a possible offer for Cadbury by a third party offeror or potential offeror.

Enquiries to Kraft Foods:

Kraft Foods
Perry Yeatman (Media)	+1 847 646 4538
Chris Jakubik (Investors)	+1 847 646 5494

Lazard (lead financial adviser)
Jeffrey Rosen	+1 212 632 6000
Antonio Weiss	+1 212 632 6000
William Rucker	+44 20 7187 2000
Peter Kiernan	+44 20 7187 2000

Centerview Partners (financial adviser)
Robert Pruzan	+1 212 380 2650

Citigroup (corporate broking)
David James	+44 20 7986 4000

Deutsche Bank (corporate broking)
James Agnew	+44 20 7545 8000

Brunswick Group (public relations)
Richard Jacques	+44 20 7404 5959
Jonathan Glass	+44 20 7404 5959

Financial advisers:

Citigroup
Leon Kalvaria

Deutsche Bank
Nigel Meek

Further information

This announcement is being made available on Kraft Foods' website (www.transactioninfo.com/kraftfoods/). Copies of the Original Offer Document, the Prospectus, supplementary prospectuses and the Original US Offer Document, as applicable, are also available on Kraft Foods' website. The Final Offer Documents and the related supplementary prospectus will be available on Kraft Foods' website as soon as practicable.

The conditions to which the Offer is subject are set out in Appendix I to the Original Offer Document (Appendix A to the Original US Offer Document), and certain further terms of the Final Offer will be set out in the Final Offer Documents and the Final Acceptance Forms. Appendix I to this announcement sets out the sources and bases of certain financial and other information contained in this announcement. Appendix II to this announcement contains definitions of certain expressions and terms used in this announcement.

Lazard & Co., Limited, which is authorised and regulated in the UK by the FSA, is acting as financial adviser to Kraft Foods and no one else in connection with the contents of this announcement and the Offer and will not be responsible to any person other than Kraft Foods for providing the protections afforded to clients of Lazard & Co., Limited, nor for providing advice in relation to the Offer or any matters referred to herein.

Centerview Partners UK LLP, which is authorised and regulated in the UK by the FSA, is acting as financial adviser to Kraft Foods and no one else in connection with the contents of this announcement and the Offer and will not be responsible to any person other than Kraft Foods for providing the protections afforded to clients of Centerview Partners UK LLP, nor for providing advice in relation to the Offer or any matters referred to herein.

Citigroup Global Markets Limited, which is authorised and regulated in the UK by the FSA, is acting as financial adviser and corporate broker to Kraft Foods and no one else in connection with the contents of this announcement and the Offer and will not be responsible to any person other than Kraft Foods for providing the protections afforded to clients of Citigroup Global Markets Limited, nor for providing advice in relation to the Offer or any matters referred to herein.

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervisory Authority) and authorised and subject to limited regulation by the FSA. Details about the extent of Deutsche Bank AG's authorisation and regulation by the FSA are available on request. Deutsche Bank AG, London Branch (and its affiliates) are acting as financial adviser and corporate broker to Kraft Foods and no one else in connection with the contents of this announcement and the Offer and will not be responsible to any person other than Kraft Foods for providing the protections afforded to clients of Deutsche Bank AG, London Branch (or its affiliates), nor for providing advice in relation to the Offer or any matters referred to herein.

Each of Goldman Sachs International, Morgan Stanley & Co. Limited and UBS Investment Bank is acting exclusively for Cadbury and for no one else in connection to the matters referred to in this announcement and will not be responsible to anyone other than Cadbury for the providing the protections afforded to their respective clients nor for providing advice in relation to such matters.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to this announcement or otherwise. The Offer is being made by the Original Offer Documents, the Final Offer Documents and the accompanying documentation. This announcement is not a prospectus and investors should not subscribe for any New Kraft Foods Shares except on the basis of information in the Prospectus (including the supplementary prospectuses) or the Registration Statement (as appropriate) which have been published and/or filed and which are available on Kraft Foods' website (www.transactioninfo.com/kraftfoods/) from time to time. The New Kraft Foods Shares are not being offered to the public by means of this announcement.

This announcement has been prepared in accordance with English law and the Takeover Code and the information disclosed herein may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The release, publication or distribution of this announcement and any other applicable Offer-related documentation in jurisdictions other than the UK, the US, Canada, France, Ireland or Spain, and the availability of the Offer to Cadbury Securityholders who are not resident in the UK, the US, Canada, France, Ireland or Spain, may be affected by the laws or regulations of relevant jurisdictions. Therefore, any persons who are subject to the laws and regulations of any jurisdiction other than the UK, the US, Canada, France, Ireland or Spain, or Cadbury Securityholders who are not resident in such jurisdictions should inform themselves of and observe any applicable requirements.

The Offer is not being extended, and will not be extended, directly or indirectly, in or into, or by use of mails or any means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a national securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction. Accordingly, copies of this announcement are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving this announcement (including, without limitation, custodians, nominees, and trustees) should observe these restrictions. Failure to observe these restrictions may render any purported acceptance of the Offer invalid.

Kraft Foods reserves the right to elect, with the agreement of Cadbury and the consent of the Panel (where necessary), to implement the acquisition of Cadbury by way of a court-approved scheme of arrangement in accordance with Part 26 of the 2006 Act. In such event, the acquisition will be implemented on substantially the same terms, subject to appropriate amendments, as those which apply to the Offer.

Notice to US investors

This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for securities, nor is it a solicitation of any vote or approval in any jurisdiction, nor will there be any purchase or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law or regulation.

The Offer is being made pursuant to applicable US tender offer rules and otherwise in accordance with the requirements of the Takeover Code. Accordingly, the Offer is subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that may be different from those typically applicable under US domestic tender offer procedures and law.

The receipt of cash and New Kraft Foods Shares pursuant to the Offer by a United States holder of Cadbury Shares may be a taxable transaction for United States federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Cadbury Shares is urged to consult his independent professional adviser regarding the tax consequences of acceptance of the Offer.

Cadbury is incorporated under the laws of England and Wales. All or some of the directors of Cadbury are residents of countries other than the United States. As a result, it may not be possible for Cadbury US Shareholders to effect service of process within the United States upon Cadbury or such directors of Cadbury or to enforce against any of such directors judgements of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue Cadbury or its officers or directors in a non-US court for violations of US securities laws.

Forward-looking statements

Certain statements contained or incorporated by reference in this announcement may constitute "forward-looking statements". All statements in this announcement, other than those relating to historical information or current condition, are forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the control of Kraft Foods, that could cause Kraft Foods' actual results to differ materially from those indicated in any such statements. Such factors include, but are not limited to, continued volatility of input costs, pricing actions, increased competition, Kraft Foods' ability to differentiate its products from retailer brands, unanticipated expenses in connection with litigation, settlement of legal disputes, regulatory investigations or enforcement actions, Kraft Foods' indebtedness and ability to pay its indebtedness, the shift in consumer preference to lower priced products, risks from operating outside the US, tax law changes, failure to obtain necessary regulatory approvals or required financing or to satisfy any of the other Conditions of the Offer, adverse effects on the market price of Kraft Foods Shares and on Kraft Foods' operating results because of a failure to complete the proposed acquisition, failure to realise the expected benefits of the proposed acquisition, significant transaction costs and/or unknown liabilities and general economic and business conditions that affect the Combined Group following the completion of the proposed acquisition. For more information on these and other factors that could affect Kraft Foods' forward-looking statements, please also see the section entitled "Risk Factors" in the Prospectus or the Original US Offer Document, as applicable, and the risk factors in Kraft Foods' filings with the SEC, including Kraft Foods' most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Kraft Foods disclaims and does not undertake any obligation to update or revise any forward-looking statement in this announcement except as required by applicable law or regulation.

Additional US-related information

Kraft Foods has filed the Registration Statement and tender offer documents with the SEC, which will be amended to reflect the terms of the Final Offer, and Cadbury will file an amendment to its solicitation / recommendation statement on Schedule 14D-9 in connection with the Offer. Cadbury US Shareholders, Cadbury Canadian Shareholders and Cadbury ADS Holders, wherever located, should read those filings, and any other filings to be made by Kraft Foods and Cadbury with the SEC in connection with the Offer as they contain important information. Those documents, as well as Kraft Foods' other public filings with the SEC may be obtained without charge at the SEC's website at www.sec.gov and at Kraft Foods' website at www.kraftfoodscompany.com. In this announcement, Kraft Foods has presented the Offer by referring to multiples of Cadbury's underlying earnings per share and underlying EBITDA under IFRS. Underlying earnings per share and EBITDA are non-US GAAP measures for IFRS purposes. The Registration Statement includes a discussion of the reasons why Kraft Foods' management believes that Kraft Foods' presentation of multiples of Cadbury's underlying earnings per share and underlying EBITDA under IFRS provides useful information to Cadbury Securityholders and disclosure of the limitations of underlying earnings per share and EBITDA as an analytical tool.

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