Police hold six suspected producing and selling melamine to milk suppliers.
Irene B Rosenfeld, the chairman and chief executive of Kraft, said: “This proposed combination is about growth.
“We are eager to build upon Cadbury’s iconic brands and strong British heritage through increased investment and innovation.”
Some analysts said it was possible that other companies could post rival bids for Cadbury.
“Speculation is already mounting that Hershey and Nestle may come together in one form or another to counter-bid, with Nestle potentially interested in Cadbury’s gum business and Hershey in the chocolate-confectionery brands, with other interested parties,” said Darren Shirley, an analyst at Shore Capital.
Britain’s Unite union called for meetings with both Kraft and Cadbury to explain the impact of the proposed combination in the UK.
Kraft indicated that it would reverse Cadbury’s intention of closing its Somerdale plant near Bristol in southwestern England, a promise the union treated with caution.
“It is essential that no one makes rash promises which give false hope to the work force, and in particular to our members under threat of redundancy at the Somerdale plant,” said Jennie Formby, a national officer of Unite.
Cadbury, whose products include the Dairy Milk and Green & Black’s chocolate brands, has a 10.3 per cent share of the world confectionary market in 2008, second only to Mars, with 14.8 per cent.
Kraft, whose brands include Toblerone and Terry’s Chocolate Orange, was fifth with 4.5 per cent.
Cadbury has 28.4 per cent of the world gum market, while Kraft has just 0.1 per cent.
Kraft said it had proposed paying 300 pence in cash and 0.2589 new Kraft Foods shares per Cadbury share, valuing Cadbury shares at 745 pence.
That represented a 31 per cent premium over Cadbury’s closing share price of 568 pence on Friday.
Graham Jones, an analyst at Panmure Gordon & Co, recommended that shareholders hold out for at least 800 pence a share.
Jones said: “A key question is whether there is a counter-bid, most likely from a Nestle-led consortium.
“However, we see the most likely scenario being Kraft being successful on improved terms.”