European Firms Reportedly Eying Nabisco

Britain’s Cadbury Schweppes and France’s Groupe Danone are set to make a $15-billion joint bid for U.S.-based Nabisco, the maker of Ritz crackers and Oreo cookies, the Sunday Times reported.

Cadbury would be expected to shoulder up to $6 billion of the cost and Danone would fund the other 60%, the paper said, without identifying its sources.

Last month, the British company said it had expressed an “exploratory interest” in parts of Nabisco, and Danone said it was holding preliminary talks with the U.S. food giant.

At the time, company officials declined to comment on speculation it might join Danone to carve up Nabisco, and a spokeswoman said Sunday that Cadbury had nothing more to say.

“You would expect a company such as Cadbury Schweppes to explore the options available to it, but we have nothing further to add and no comment on the Sunday Times article,” she said.

Cadbury is apparently looking to cherry-pick Nabisco’s U.S. sugar confectionery business, which includes the Lifesavers brand, and analysts say it makes strategic sense for the French group to extend its reach into the United States.

The British company has more than 3 billion pounds in cash and debt available for acquisitions.

A total of 13 interested parties have already signed confidentiality agreements with Nabisco, and a Cadbury-Danone joint bid would have to compete with other giants such as RJ Reynolds Tobacco Holdings, current favorite Philip Morris, as well as U.S. financier Carl Icahn.

Danone is the world’s leading biscuit producers, thanks to its domination in Europe and Asia, but it lacks a U.S. foothold in cookies despite sizable U.S. interests in mineral waters and dairy products.