Lord Mandelson blasted his way into the Cadbury takeover battle today, warning the US foods group Kraft that it would face "huge opposition" from the government if it tried to make a "quick buck" out of the British chocolate maker.
The business secretary, mindful of Kraft's closure four years ago of the Terry's factory in York, said "asset stripping" would not be tolerated although he accepted he could not halt any bid accepted by shareholders.
"Don't think you can come here and turn round a short-term profit and make a quick buck. You will face huge opposition, not just from the workforce and the local population but also from the British government if you do that," said Mandelson on the day Kraft published the formal offer outlining details of its £10bn hostile bid. The document offers specific assurances on British employment.
"I am watching this very carefully, not because I can stop it or deflect it but I am saying respect our companies, respect our workforce, respect our goods and look to the future," he added.
Mandelson was speaking at a conference on Asia for businessmen in Birmingham and his comments show he is willing to use his self-styled "industrial activism" to try to influence live bid battles. The former EU trade commissioner is believed to be ready to extract commitments on jobs and investment from any purchaser although he denied there was any blanket opposition to foreign buyers.
He also took a sideswipe at hedge funds which have taken a 15% stake in Cadbury, apparently in the hope of benefiting from a rise in the shares should Kraft be successful. "We expect a genuine commitment to be made to the interests and corporate governance and to British companies rather than those things being run roughshod by those who have a more narrow and short-term interest," he said.
Mandelson highlighted the philanthropic legacy of the Quaker-founded Cadbury business, allying himself with remarks made by its chief executive, Todd Stitzer, who is trying to fend off the hostile takeover by Kraft.
Mandelson first started to talk about "industrial activism" 12 months ago, shortly after returning to the government following a long exile as EU trade commissioner. He has already set up the "cash for clunkers" scheme to help British carmakers and wants to help the UK become a centre for green manufacturing in support of a low-carbon economy.
Kraft kicked off the formal 60-day timetable for its takeover bid with a 180-page circular detailing its argument that the two companies would be a good fit, creating a "global powerhouse" in confectionery.
The US company said Cadbury's presence in emerging markets such as India and South Africa would provide a new channel for its own products, which range from cheese slices to frozen pizza, Ritz biscuits and Maxwell House coffee, while it could offer Cadbury an avenue into Brazil, China, Russia and Mexico.
Kraft is looking for $625m (£380m) in savings through the deal but said it would keep open the threatened Somerdale factory near Bristol and invest in Cadbury's Bournville plant in the Midlands, "thereby preserving UK manufacturing jobs".
As expected, Kraft's bid comprises 300p in cash and 0.25 Kraft shares for each Cadbury share. Its offer document offered a glimpse at the differing approachs towards executive pay at the two firms. While Stitzer earned a hefty £4.1m last year, his Kraft counterpart, Irene Rosenfeld, took home a far larger $17m (£10.3m).
Under legally required disclosures, Kraft revealed that Rosenfeld would be entitled to a $49m personal payoff if Kraft were ever taken over. She is allowed to use Kraft's corporate jet for personal trips, justified by "security purposes". She gets a car allowance, home security, annual financial planning advice worth $10,000 and an annual award of shares of between $3.1m and $8.8m.
Several other possible bidders are waiting in the wings. Hershey, a much smaller US chocolate company controlled by a family trust, has made its interest public, as has the Italian firm Ferrero, known for its Tic Tacs, Ferrero Rocher chocolates and Nutella spread.