The announcement that the Cadbury Board have accepted the increased takeover offer from Kraft has made it a sad day – for this great British company, for Birmingham and for the Cadbury workforce.

Takeovers only usually make any sense when the company being taken over has major problems that the predator company can put right. This is not the case with Cadbury, which is one of the most successful and admired companies in the World.

Because of this, Kraft have had to pay over the odds for the company. While this may be good for the short-term interests of Cadbury’s shareholders (though in the long-term its very doubtful that Kraft can produce the returns that Cadbury have), its bad news for pretty well everyone else. To raise the money, Kraft will burden the business with debt. This will create immense pressure to cut costs and sell assets to meet the repayments. Bad news for future investment in Cadbury and its workforce. Bad news too for the communities where its factories and offices are based. Especially Birmingham.

So why does has it happened? Well with British takeover rules pretty well anyone willing to pay the asking price can buy any UK business quoted on the stockmarket. But there is lots of evidence that most contested takeovers fail to add value. Instead they seem to be more about boosting the egos of the managers of predator company, in this case Kraft. And of course Kraft’s investment bankers and financial advisors will earn a whopping great fee for their services.

It doesnt have to be like this. No German company could be taken over in this way. Their company ownership structures embed real control with the local community (via the local and regional authorities) and the workforce. I believe it is time to move to a similar company ownership structure in the UK, so that wider interests than just those of shareholders, are protected. Sadly, any such reforms would now come too late to save Cadbury as an independent business.