By Matthew Champion.

Chocolate maker Cadbury is under pressure to accept a £10.2 billion takeover offer from Kraft after the US food giant pledged to keep open a factory earmarked for closure.

Cadbury said on Monday the unsolicited offer "fundamentally undervalues" the group, but shares leapt by up to 37 per cent in early trading on the news.

Kraft Foods said its 745p per share offer would create a "global powerhouse in snacks, confectionary and quick meals" with annual revenue in excess of $50 billion.

"We are eager to build upon Cadbury’s iconic brands and strong British heritage through increased investment and innovation," said Irene Irene Rosenfeld, chairman and chief executive officer of Kraft Foods, which owns the Kenco and Maxwell House coffee brands and Oreo biscuits.

"We have great respect and admiration for Cadbury, its employees, its leadership and its proud heritage," she continued.

Ms Rosenfeld added that under the merger plans, UK would be a "net beneficiary in terms of jobs".

"For example, we believe we would be in a position to continue to operate the Somerdale facility, which is currently planned to be closed, and to invest in Bournville, thereby preserving UK manufacturing jobs," she said.

Cadbury, which was founded in Birmingham in 1824 and owns the Dairy Milk and Green & Blacks brands, said in a statement: "The board of Cadbury reviewed the proposal with its advisers and rejected it.

"The board is confident in Cadbury’s standalone strategy and growth prospects as a result of its strong brands, unique category and geographic scope."

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