LONDON Kraft Foods Inc will be grilled by British parliamentarians next week amid claims the U.S. group backtracked on plans to keep a Cadbury plant open after its takeover of the British chocolatier.
The closure plan is not the only controversy about the deal. The loss of one of Britain's most cherished brands to a foreign owner has sparked emotional reactions, and in an election year, heavyweight politicians such as business minister Peter Mandelson have openly expressed disquiet about it.
"Parliament is right to call Kraft to account. It was wrong that a debt-laden American multinational took over a successful British company," Jack Dromey of trade union Unite said in a statement this week.
"It was wrong that Kraft misled Cadbury workers and the public, only to break their promises within seven days," added Dromey, who will also speak at the session and plans to meet Cadbury workers on Friday.
The hearing comes at an inconvenient time for Peter Kiernan, a senior banker at Lazard who advised Kraft on the deal and who is about to become head of the Takeover Panel -- the country's takeover watchdog. His appointment to the panel was delayed twice during the Cadbury takeover process.
"In the currently politically charged atmosphere anyone associated with the Cadbury deal has a very raised profile that causes a degree of discomfort," said Peter Hahn, a senior fellow at London's Cass business school, who also advises the country's Financial Services Authority.
The panel launched in February a public consultation on the way mergers are conducted, and while it made no specific reference to the Cadbury situation, it did mention Mandelson's "suggestions for consideration."
The panel -- which has said it will consult on possible changes to the rules governing mergers and acquisitions -- has in the past declined to comment on the reasons for the deferral of Kiernan's appointment. Reuters has not been able to reach Kiernan in the past few weeks.
The Business Select Committee will question Marc Firestone, Kraft executive vice-president, Richard Doyle, HR director for Cadbury Britain and Ireland, and Trevor Bond, Cadbury's president for Britain and Ireland, on Tuesday.
Dromey will also be speaking on behalf of Unite.
Kraft said in February the Somerdale plant in western England would close with the loss of around 400 jobs. Kraft Chief Executive Irene Rosenfeld said in a letter to Cadbury Chairman Roger Carr in September she believed her company would be in a position to continue to operate it.
A Kraft spokesman declined comment on the meeting, but said the inquiry into the closing of Somerdale would have no impact on the Cadbury deal.
"We've operated as a combined company since February 2 and our financials will be consolidated from that date," he said.
British Select Committees examine the work of government departments and produce reports on areas of public policy that can be debated in the House of Commons.
(Additional reporting by Brad Dorfman; Editing by David Holmes and Andrew Callus)