Which Kraft-Cadbury Divestitures Can PE Snack On?
The answer is not many. Back when this chocolatey drama began, we speculated that private equity’s biggest role in the deal may be to snap up a few divestitures. With a deal of this size (£11.5 billion, $19.5 billion), it seemed there’d be plenty, especially if you look at past precedent. Thanks to Anheuser Busch’s $52 billion sale to InBev, post-merger divestitures actually drove private equity activity in 2009. AB-Inbev scrambled to unload corporate orphans as a way to raise money to pay down the massive debt it took on for the merger; as a result, AB-Inbev divestitures made up three of the ten largest private equity deals of 2009. You’d think Kraft and Cadbury, striking in January what may be the largest deal of the year, would have a similar plan. According to Kraft's executives, that’s not the case at all.
