Kraft Foods says major takeovers hard ahead of spin-off

Kraft Foods Inc. sees large acquisitions being difficult to make ahead of its full spin-off from majority owner Altria Group Inc., news agency Reuters reports. "Very large acquisitions will be difficult as the Altria situation precludes acquisitions using a lot of stock," Kraft Foods CEO Roger Deromedi told Reuters in an interview. Altria group, which owns cigarette maker Philip Morris and almost 87% of Kraft Foods, needs to clear a number of legal hurdles regarding tobacco litigation in the United States before it can spin off Kraft completely.


According Reuters, analysts have speculated that Kraft may look to buy France s Danone or Britain s Cadbury Schweppes Plc to expand out of its North American heartland, which still accounts for some 68% of group sales. The company makes 55% of its sales from its four key areas of coffee, cheese, cookies and beverages and says it is looking the expand these businesses around the world.
"We are focused on our global core areas and acquisitions in these areas," said Deromedi, adding that the group will gain "greater flexibility" to make acquisitions once the spin-off from Altria is completed.