HELENA SÁNCHEZ-CALERO

Company law
NOTION OF COMPANY
It is clear, however, that in legal theory (though not, as we shall see, always in economic reality )the term company implies
an association of a number of people for some common object or objects.

From a functional viewpoint there are today three distinct types of company:
• Companies formed for purposes other than profit of their members, i.e. those formed for social, charitable or quasi-
charitable purposes.
• Companies formed to enable a single trader or a small body of partners to carry on a business, In these companies,
incorporation is a device for personifying the business and normally, divorcing its liability from that of its members
despite the fact that the members retain control and share the profits.
• Companies formed in order to enable the investing public to share in the profits of an Enterprise without taking any part
in its management.

VEHICLES & FORMS FOR ORGANIZING BUSINESS ACTIVITIES

• This should be the first decision to make in terms of legal strategy.
• Individual entrepreneur (simple structure) v. “legal persons” (complex organizations). Differences:
• Conditions at law
• Costs
• Funding
• Risk Assess contents, sophistication, requirements and people involved in
the business: complex businesses normally require complex legal
structures
ADVANTAGES OF THE SOLE TRADER OVER THE DISADVANTAGES OF THE SOLE TRADER OVER THE LEGAL
LEGAL PERSONS: PERSONS:
• Sole trader is easier and less expansive to • The sole trader has unlimited liability for all claims against
create. Sometimes no forms are necessary. the firm. Mainly the entrepreuneur exposes his/her assets,
• The owner has complete authority over both personal and profesional to business risks. No line can
decisions about the direction of the business be drawn betweem godos devoted to personalor family
• No risk of conflicto with partners in the purpose and profesional ones. (Well, this has change as in
decisión-making Spain we have the Entrepreuneur Act).
• The Sole Trader is often heavily dependent on the owner´s
skills to manage the business. The lack of any particular skill,
of course, can be complemented by hiring someone with
specific skills.
• It is often more difficult to raise debt capital because the
owner´s fianncial background may not alone quality for a
loan.
CASE 2: OGLOV. The end justifies the means.
OGLOV is a Barcelona-based company founded in 2021 and specializes in delivering online food orders to customers' homes. The company
operates in 32 countries and over 2,000 cities, collaborating with more than 200,000 restaurants and other businesses. Users can access a wide
range of services through the app, such as supermarkets, electronics, health and beauty, and gift shops, among others. OGLOV acts as a link
between users, businesses, and riders.
1) Which kind of legal form would you have chosen? Why?
At the beginning, OGLOV had to decide which legal form was the most appropriate for its corporate concept.
OGLOV opted for a Limited Liability Company as their legal form. However, rather than employing the riders who delivered the relevant orders,
OGLOV compelled them to operate as self-employed workers who collaborate with them. This was mainly due to the high labour costs (which a
start-up at that time could not easily afford), as well as the lack of clarity about the legal requirement to hire them as employees of the LLC.
OGLOV opted for a Limited Liability Company as their legal form. However, rather than employing the riders who delivered the relevant orders,
OGLOV compelled them to operate as self-employed workers who collaborate with them. This was mainly due to the high labour costs (which a
start-up at that time could not easily afford), as well as the lack of clarity about the legal requirement to hire them as employees of the LLC. On
September 20th, the Spanish Supreme Court (the Labour and Social Section) ruled out that the riders must be hired as employees by the
relevant company. Despite this judgment, it was not until May 2021 that they approved the so called the “Rider Law”.
Even after those two important facts, OGLOV persisted with its original business model, which has exposed it to enormous penalties.
2) Why do you think that the company (despite all these legal facts) has not amended its business model?
3) From an ESG oversight, has OGLOV acted properly?
PIERCE THE CORPORATE VEIL
Company with legal personality
LIMITED LIABILITY:
It follows from the fact that a corporation
Natural is a separate person that its members are
not as such liable of its debts. Hence, in Third-party
person/shar the absence of express provision to the
contrary, the members will be completely Creditors
eholders free from any personal liability for the
Company´s debts. The rule of non-liability
Debtors
also applies to obligations other than
debts: the company is liable and not the
member.

Most of the European Courts considered that it will only be appropriate in very limited
circumstances to ‘pierce the corporate veil’. Those circumstances will exist only where
a person is under an existing legal obligation or liability or is subject to an existing
The legal separation legal restriction which he deliberately evades or whose enforcement he deliberately
between a corporation and frustrates by interposing a company under his control. However, it was made very
its shareholders, clear that a court may only ‘pierce the corporate veil’ in those limited situations for the
protecting shareholders sole purpose of depriving that company or its controller of the advantage which they
from personal liability for
would otherwise have obtained by the company’s separate legal personality.
the company’s debts and
obligations.
Parra v García

Five residential
investment
properties in However, it is to be noted that:
(1) ownership of the properties was vested in the companies
London prior to the breakdown of the marital relationship; and
(2) there was no evidence that the husband’s actions in arranging
for the companies to hold ownership of the properties was
intended to evade any obligation to his wife connected with the
divorce proceedings.
PARRAS GROUP DISCUSS
Wholly owned and controled • In this case should the Family court pierce the corporate veil
of both of Mr Parra companies?
(directly ot through intermediate
entities by Mr. Parra)

Mr. Parra Mrs. Parra

The Marriage assets

where only two
residential houses.
How a company is created
The creation of a company involves a twofold process:
As already emphaised, the fundamental attribute of
1)The contract or the articles of incorporation
corporate personality is that the company is a legal entity
(or of association): legal statement signed by all distinct form its members. Hence it is caplable of enjoying
initial shareholders or guarantors agreeing to rights and of being subject to duties which are not the same
form the company. as those enjoyed or borne by its members. In other words it
has LEGAL PERSONALITY and Is often described as an
2) Bylaws: A corporate document that outlines artificial person in contrast with a human being, a natural
the internal rules and procedures for
governance, including how meetings are person.
conducted and directors are appointed.
Bylaws provide a framework for the
corporation's internal
operations.

Articles of incorporation and bylaws shall include at least name, address

and the object of the company. Nonetheless, the doctrine of separete corporate
Once we have already filled the articles of association and the bylaws, we
will need to register the company in the Mercantile Registry to achieve personality is what underpines much of the success of
legal personality and be able to act on behalf the company. If the company companies as effective business structures, and its
is not properly registered, is a matter of fact that the legal personality
would not be in force. So, this is a huge step when it comes to creating a inviolability was further reinforced in Prest v Petrodel,
business. It will depend on the type of the company that we create the where the Supreme Court affirmed the importance of
formal requirements will be different.
the doctrine and indicated that the courts may only
“pierce the corporate veil” in exceptionally limited
circunstances.
Managing bodies of a company
General Meeting of members or shareholders:
• It is also considered the “brain of the company” as it is the organ of the company which has the decision-making
power relating to the most fundamental issues of the organization: relations between members and the company,
structure or purpose of the company.
• The general meeting called within six months of the end of the previous fiscal year is known as the “annual” general
meeting (or “AGM”). If a general meeting is held outside that time frame, it is “extraordinary” (“EGM”) and meant to
address urgent or pressing matters that couldn't be settled at the AGM.
• Calling the general meeting must accomplish formal requirements, it should by called by letter or email, or by public
announcements (or both). The content of the general meeting it should follow an agenda that should be notifed to
the shareholders alongside with the calling.
Directors of the company:

Are the people that represent the company in front of other people or entities they are legally responsible for the
company’s business and can be held accountable for its actions. Although being closer to the daily life of the company
and having their own authority for that purpose, directors are in general subject to the internal authority of the general
meeting.
Shareholders agreements
The freedom of the shareholders to fashion the company´s constitution facilitates the input of a significant
element of “private ordering” into the rules governing the company, but the articles of association are not the
only method whereby the shareholders can generate their own rules for the governance of their affairs. An
alternative method is an agreement, concluded among some or all the shareholders , but existing outside and
separate from the article's ad to which the company itself may or may not be a party.

The main advantages of the shareholder agreement

over the articles are that the agreement is a private
document which does not have to be registered at
the Companies House and that it derives its
contractial force from the normal principles of
contract law and not from the Act, so that the
limitation discussed above on the statutory contract
do not apply to shareholder agreements.

The main disadvantages are that the

shareholder agreement does not
automatically bind new members of
the company, as the articles do.
 Critical Issues when creating a business
company.
The main element in creation of any business is the business idea itself. Companies are merely vehicles for the business
project, and to that extent companies have an instrumental carácter. However, companies allow us to properly organize
our relations. Choosing the right type of company and providing it with a suitable structure can prove to be crucial in the
final outcome of our business.

One thing that you need to take very much into account in connection with all this is that creating a company may
potentially (and will normally) entail several different situations that require the proper strategy and measures.

For instance, as members in the future company, you and your future partners have a common interest (which includes
making a profit with your business). This is why you créate the company in the first place.
Differences:

• In the PLC the mínimum capital required is 60.000 euros whereas for the LLC the mínimum capital required is 1 euro. See
Article 4 of the LSC.
• In the PLC the capital is divided into shares, considered as transferable securities that are freely transferred and capable
of being traded on stock markets.
• LLC the capital is divided into holdings.
• PLC are used by operators as the prototypical form of large open listed or stock corporations, established for flotation and
to have several investors.
• The board of directors is bigger in a PLC.
• Calling a general meeting requires has to be done with one month in advance in the PLC whereas LLC requires fifteen
days.
• Liability of the shareholders constricted in JSC.

Exercise:

a) Maria Chiara and Carmen are 3 sisters who want to carry on a homemade jam business. Originally, they are going
to keep the property of the business into the family, but they don’t rule selling in the future a part of it in case there
is any venture capital interested on it. What type of company is more suitable for them? Why?
 Name, Address, and term of the company

The incorporators must decide on a suitable name. This identifies the artificial person, describes its status as a JSC or LLC, and over time
becomes the name associated with the reputation and goodwill of the company. Given the importance of a Company's name, there are
rules governing the choice of names (including their length), their mandatory publicity, their protection from abuse, and their alteration.
For instance, If the company is limited company its name must end with the prescribed warning suffix. The purpose of this requirement is
to warn a person dealing with the company that it is a body with limited liability.

The address of the company it called in company law as the registered office of the company. The registered office of the company
should be place in the main center of the company. Letters, reminders, and legal notices from Companies House, HMRC, the courts, and
other government departments and agencies will be sent to your registered office. It is important to consider privacy and professional
image when choosing a registered office. First of all, your registered address will be published on public register of companies at
Companies House. Secondly, you want to create a good impression for prospective clients and investors. Taking these factors into
consideration, you may not want to use a residential address as a registered office. To protect your privacy and additionally create a
more favourable professional image, it would be better to use a commercial (non-residential) address as a registered office.

Finally, companies have a duration term, which you have to specify as well. The most practical option here is to give the company an
indefinitely term, which means that the company will endure indefinitly in time, and will be extinguished only when the law provides or
he partners in the general meeting so decide.
 Purpose and object of the company
• The object of the company it define as the sort of activities that the company will carry on. For instance a company who
manufactures shoes has as objetc the manufactoring of the shoes, if after a time the owners decide to manufacture
jackets as they can take and adavntage of the factorys, the object of the company then will be manufacturing shoes and
jackets.
• The Friedman Doctrine, also called shareholder theory, is a normative theory of business ethics advanced by economist
Milton Friedman which holds that the social responsibility of business is to increase its profits. This shareholder primacy
approach views shareholders as the economic engine of the organization and the only group to which the firm is socially
responsible. As such, the goal of the firm is to increase its profits and maximize returns to shareholders. Friedman argues
that the shareholders can then decide for themselves what social initiatives to take part in, rather than have an executive
whom the shareholders appointed explicitly for business purposes decide such matters for them.
• This totally contradicts the ESG trends.
 Capital and contributions
When creating a company, you must set the capital figure in the bylaws. This has to be expressed in money, and specifically in
the official currency of the place of incorporation (in the eurozone, for instance, in euro). The capital figure has to reach at
leat the minimum capital required in law. As we see previously in session 6, in order to protect the interests of creditors, to
require companies with a capital of less than 3,000 euros to (i) set up a legal reserve of an amount equal to least 20% of
profits until the sum of the legal reserve and the share capital figure reaches 3,000 euros, and (ii) make the shareholders
severally liable, along with the company, up to the difference between the amount of 3,000 euros and the share capital
subscribed if, in the event of liquidation, the company's equity is insufficient to pay its corporate obligations.

Articles of association-> the founding members of the company accept the obligation to make contributions to the
company´s capital, thereby providing the company with its initial resources. These contributions (the investment they make)
may consist of different things, and this is one of the pints where the law sets some limitations. Basically, one of the main
concers of legal rules in this point is that anything that may be provided by the founding members to the company as a
capital contribution has a real economic value, as the company´s resources will be used in transactions with third party
people, and they deserve this kind of protection too.
UBER STUDY CASE
 Uber
Astronomic growth attracted high-profile investors. The company’s earliest venture-capital investor was Benchmark Capital, which
took at 20 percent stake at the time, investing $12 million in Uber in 2011 and giving it a $60 million valuation. As the company
grew, Benchmark retained its position as the company’s largest venture investor. Later rounds included big-name funds such as
Summit Partners, Kleiner Perkins, Menlo Ventures, and Texas Pacific Group; mutual fund giants Fidelity, BlackRock, and Vanguard;
technology companies Google, Alibaba, and Microsoft; sovereign wealth funds of Qatar and Saudi Arabia; and prominent
individuals such as Jeff Bezos of Amazon. Uber’s 2016 fundraising round gave the company a valuation of $68 billion, making it the
largest pre-IPO company in the U.S.
Later, there were several legal issues that required UBER getting legal assistance from Covington & Burling (a well-known law firm).
As a result of the above-mentioned legal assistance Covington & Burling issued a report which contains several recommendations
for leadership, governance and workplace changes. Nevertheless, Ubers board of directors voted unanimously to adopt
Covington's recommendations. Kalenick and his co-founders still sitting on the boards of directors.
1. Why Kalanick and his co-founders retained control of the company if the stakes of the company belongs most of them to the
venture-capital investors?
2. Discuss what do you think it is better when you are openning the company to high profile investors dual-class share, extra
voting power…etc…
THE GENERAL MEETING-DECISION MAKING
Unless otherwise provided in the bylaws, the general meeting shall be held in the municipality where the company has its
registered office. If the notice of the meeting does not specify the location, it shall be understood that the meeting has been called
to be held at the registered office.
Between the notice of the meeting and the scheduled date for the meeting, there must be a period of at least one month for
corporations (sociedades anónimas) and fifteen days for limited liability companies (sociedades de responsabilidad limitada).In
cases of individual notice to each shareholder, the period shall be counted from the date on which the notice was sent to the last
of them.

Notwithstanding the abovementioned call procedure, a meeting can be validly held on an informal basis. This meeting is called
“universal meeting” and is held when members holding the entire capital are attending and agree to adopt decisions according to
the agenda they decide, even if it has not been formally convened. That is very common in small and medium-sized companies
where partners can agree to celebrate a meeting and adopt decisions, seizing, for example, the opportunity of being together
anywhere and for any purpose.

Minimum quorum has to attend is not second call at least 24 hours.

Prof. Sánchez-Calero
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MINUTES
All decisions adopted by company members have to be recorded in the Minutes.

• Minutes are for evidence purposes.

• Minutes enable shareholders to exercise their right to be informed about company’s activities and decisions.
• If the decision adopted in the meeting has to be registered in the Registry, it is recordedin the Minutes.

Decisions are adopted on majority basis. Different majorities are established by law depending on the matter to decide on. More
important the decision is, higher the majority is required. Bylaws may modify majorities stated by law, stating higher majorities that
those provided for the law; unless expressly forbidden. Legal majorities cannot be reduced by bylaws though. For bylaws to
personalize decision-making model, legal majorities (number or percentages of votes) can be increased. Nevertheless, requiring
unanimity (100%) is not admissible. Why cannot companies require unanimity in the decision-making? Decision-making in commercial
companies is inspired by a capital-based majority rule (a kind of “capitalist democracy”). In practice, if unanimity is required,
companies might become ungovernable. Deliberating and decision-making processes are traditionally presumed by the law to be
naturally face-to-face and mainly oral. Today, the use of new technologies enables distance attendance and voting by simulating digital
spaces able to emulate presence meetings (videoconference, digital platforms).

Prof. Sánchez-Calero
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Exercise 1 , We are going to call a general shareholders'
meeting. To do this, along with your group, the first step is to
decide on your company’s name and type. You should
determine the name of your company.The exercise consists
of the following:Prepare the agenda for the General
Shareholders' Meeting.
Issue the call for the general meeting (there is no website, so
you will need to do it in the traditional way).

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To contest a resolution of the general meeting.
Decisions adopted are subject to contestation by members on the following grounds:
• Being against the law
• infringing articles of association
• harming company’s interests in the benefit of one or several shareholders/partners or third parties.

According to the severity of infringed interest decisions are classified as null or avoidable. As far as null decisions are concerned, all shareholders,
directors and any other person holding legitimate interest, are entitled to claim for declaring decision void. In case of avoidable decisions, only those
shareholders having attended the meeting and whose opposition has been recorded in the minutes, directors and non-attending shareholders or
those shareholders illegitimately deprived of their voting rights.

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Exercise 2.
Company Name: MERCADONA
CorporationResolution No. 2024-05: Approval of Contract
Date of General Meeting: October 15, 2024
Resolution: "It is resolved that MERCADONA shall enter into a long-term contract with
Seurodis the principal manufacturer of Divertidas galletas for the procurement of cookies
at a price 30% lower than the market average for similar products. This contract shall be
effective for a duration of five years and is to be signed by the Chief Financial Officer.“
To solve the case, you should know that:
1) The owner of Seurodis is the wife of Emilio (Mercadona head of strategy).
2) Although the price of the product is lower, the quality is also lower, so the company
knows that it will face a reduction in price
Question Can the minority shareholders of Mercadona contest the agreement of the
general meeting

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Administration body (or direction) may adopt the following structures:
- sole director,
- several directors acting on jointly and severally basis – either director is
fully entitled to bind the company, and accordingly, can sign individually
in the name of the company and represent it against third parties -;
- two directors acting on joint basis – both directors have to sign any
transactions to be valid, they cannot act individually and separately -; and
- Board of Directors that is collective body (a committee) acting and
deciding on collegial basis and according to majority rules.

Prof. Sánchez-Calero
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FINANCING THE BUSINESS PROJECT: FINANCIAL
STRUCTURE, INVESTORS AND INVESTMENT
AGREEMENTS
STAGE 1: IDEA AND START-UP (seed-capital)
3FS: Family, Friends and Fools
Business Angels
Incubators and seed accelerators: funding, mentoring, training, expertise, management
skills, technical support, a place to work…
Crowdfunding
STAGE 2: EARLY GROWTH AND EXPANSION
Venture capital funds
Private equity
STAGE 3: MATURITY
Mergers and acquisitions and others
Bank financing
Management Buy-Out, Management Buy-In, Buy-in Management Buyout

Prof. Sánchez-Calero
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Preventing dilution while facilitating entry: nominal value and premiums
The entry of an investor in the company could arouse an unwanted dilution problem.
Since the investor may be willing to invest a high amount of money as equity capital,
existing partners / shareholders can have to face a dramatic reduction of their
percentages and, as a consequence, a significant decrease in prospective dividends and, as
a matter of fact, a loss of control.

A Drag Along Clause is a provision commonly found in shareholder agreements, especially in companies with various types of
investors. Its purpose is to protect the interests of majority shareholders by allowing them to force minority shareholders to
join in the sale of the company under the same terms.A Tag Along Clause, on the other hand, protects minority shareholders.
If majority shareholders decide to sell their shares to a third party, the Tag Along Clause allows minority shareholders to join
the sale under the same terms as the majority.

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The Listing Process
Helena Sánchez-Calero
Benefits of being listed
• Finance your growth
• Prestige and brand image
• Share liquidity and objective valuation
• Access to a huge investor community
• Professionalization and positioning in Corporate Governance issues

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Types of Listings
• OPV (in Spanish Oferta Pública de Venta): the owner/s of a company
want to sell a significant part of it.
• IPO or Initial Public Offering (in Spanish OPS or Oferta Pública de
Suscripción): the shares on offer are newly issued.
• Direct listing: shares of the company are not placed within new
investors, but rather traded on an organized and regulated market.

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The listing process
Preliminary Requirements
• Being a PLC (sociedad anónima) with all capital fully paid up and no restrictions on the transfer of the company's
shares.
• These shares must be represented by book entries.
• Minimum capital of 1,202,025 euros, not counting stakes of ≥ 25%.
• Minimum market value of 6,000,000 euros.
• Sufficient dissemination among the public.

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FIRST STEPS
1) First of all, a due diligence process must be carried out, involving close scrutiny of
its financial, legal and business affairs. This process will provide in-depth
knowledge of the company and allow it to correct any problem or issue before
offering its shares or securities. It must also draw up and publish a prospectus.
Therefore, the due diligence process will end shortly before the planned operation
is carried out and will be continuously updated with new information.

Helena Sánchez-Calero
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Secondly, the company will need to draw up the necessary shareholder agreements and amend the issuer’s articles of
association to reflect its new status as a listed company. The following agreements are particularly notable:
– Relating to admission to trading. Those relating specifically to an offer to sell the company’s shares and a request for
admission to trading of those shares.
– Corporate website. An agreement must be drawn up to create a corporate website and duly filed with the
Companies House or notified to all shareholders.
– Corporate governance. The company will need to make certain amendments to its articles of association to regulate
the functioning of the general meeting, the board of directors and the various committees that must be set up for that
purpose, as well as other modifications to bring the company in line with applicable regulations and recommendations
on corporate governance. Meanwhile, the internal rules and regulations of the general shareholders meeting and the
board of directors and the internal code of conduct of the issuer must all be approved (or amended accordingly if they
already exist) to bring them in line with the company’s new status as a listed company.
– Representation of the shares as book entries and their free transfer. The articles of association of the issuer must be
amended to show that its shares are represented in book entry form, naming Iberclear as the entity responsible for
keeping the book-entry register, and to remove any restrictions on their free transfer.

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Finally the resolution to convert the company must be formalised in public instrument and filed at the Companies Registry.
The public instrument must also be submitted to the CNMV and to Iberclear for registration and filing. After that, an
announcement must be published in the official gazette of the Spanish business register and in one of the most widely
circulated newspapers for the area in which the company has its registered office, stating the timeline and agreed procedure
for transforming the system through which the shares are represented.

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CASE 1. Golden Goose S.p.A.
Luxury sneaker brand Golden Goose isn't afraid of a little wear and tear. Boosted by A-list celebrities like
Taylor Swift and Chris Hemsworth, the Italian company has made a splash in the fashion world by selling
scuffed up sneakers bearing what it describes as a "vintage finish.“

An IPO is the natural next step in the success story that started in Venice in 2000 and I am deeply proud
to lead the Golden Goose Family to this moment.

In May 2024, the company announced intentions to launch an initial public offering (IPO) on the Milan
Stock Exchange, aiming for a valuation of up to €2 billion.

What steps should Golden Goose follow to become publicly traded?

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IPO, SPO AND TAKEOVER BID

IPO Existing shares To allow original

shareholders to sell
their stake
SPO New shares Raise money
TOB New or existing To take the control
of the company

Prof. Sánchez-Calero
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Case study: Kraft’s takeover of Cadbury Kraft made an offer, but Cadbury
rejected it.
The hype created by rumors of takeover
figures led to exciting speculations.
Media reported Ferrero to be considering
a rival bid. Hershey’s confirmed its own
interest for same purpose. There were
not only speculations of a joint bid but
CADBURY Kraft also of Kohlberg Kravis Roberts & Co.
joining the bidding race. All this favored
Cadbury and Kraft are both multinational
(target operations with activities in both developed
Cadbury whose share price witnessed
new highs. Hershey’s and Ferrero would
company) and developing countries. Cadbury is however struggle to bid alone and only their
the market leader in UK and Ireland’s combined offer could beat Kraft’s offer.
confectionery where consumers have a liking
for British chocolate containing vegetable oil On January 18, Kraft finally managed to
having a richer taste in milk and also sweeter take over one of the world’s second
as opposed to continental chocolate having largest confectionery manufacturer in a
cocoa fat content; hence Kraft has a low share hostile bid of an enormous 11.5billion
Due to recessionary times following fall in sales, many in such markets. Also, Cadbury’s strong (US$19.5billion). This deal will be
companies in the confectionery industry recognized the standing in the Indian (Schweppes) and North remembered in history as one of the
American Markets was cleverly identified by largest transnational deals, especially in
potential of merging with their competitors to become Kraft who wanted to tap it and exploit under the aftermath of credit crunch. After four
competitive and enjoy economies of scale. Cadbury had its own name now to add to its success story. months of continuous resistance,
Cadbury shareholders agreed to Kraft’s
continued to be a strong performer in the confectionery offering of $19.5 billion, (840 pence per
industry and shown steady performance and growth in light share). This was agreed upon with the
of the turbulent economic times. Much of Cadbury’s growth spirit of creating the world’s largest
confectioner. This consisted of 500 pence
was due to its presence in emerging global markets. Kraft in cash per share and the remaining
was attracted to Cadbury due its strong performance during amount paid to Cadbury shareholder in
the form of Kraft shares. The
the economic crisis. This led to Kraft’s proposal to Cadbury shareholders had the power to decide
of a takeover. the mix of amount they wanted in cash
and shares. According to estimations, the
finals offer presented a multiple of 13
times Cadbury’s earnings in 2009 (after
interest, taxes and debt were paid).
Prof. Sánchez-Calero
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Case study: Kraft’s takeover of Cadbury
After four months
of continuous
resistance, Cadbury
shareholders
agreed to Kraft’s
offering of $19.5
billion, (840 pence
per share)

740 PENCE PER

SHARE
In september
2009

Prof. Sánchez-Calero
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