Cadbury, the 186-year old British confectionery group, has accepted an £11.6 billion takeover bid from US food giant Kraft.

Cadbury, the 186-year old British confectionery group, has accepted an £11.6 billion takeover bid from US food giant Kraft.

The move comes after months of difficult negotiations following Kraft’s hostile takeover bid in September. The initial offer, which valued the company at 745p a share, was rejected by the board, but has since been raised to 850p a share.

In the run-up to the deal, business secretary Lord Mandelson has asked shareholders of major companies to take a long-term view of their stakes, while prime minister Gordon Brown has urged Kraft to keep Cadbury’s business in the UK.

In the six months ending June 2009, Cadbury reported revenue of £2.7 billion and pre-tax profits of £112 million.

The takeover panel of Cadbury has given confectionary businesses Hershey and Ferrero, who have shown interest in acquiring the company, until January 25 to make an offer.