Updated from 4:13 a.m. ESTLONDON ( TheStreet) -- Kraft Foods ( KFT) has agreed to buy Cadbury ( CBY) in a deal valued at about 11.9 billion pounds ($19.5 billion). Kraft, in a statement to the London Stock Exchange, said the offer values Cadbury at 840 pence a share. Cadbury shareholders also will be entitled to a special dividend of 10 pence a share. Kraft will pay 500 pence a share in cash and 0.1874 a Kraft share for each Cadbury share. Cadbury believes the offer represents good value for its shareholders, according to Chairman Roger Carr. Kraft's previous offer for Cadbury was valued at a little more than $17 billion, an offer that Cadbury had called "derisory" and "unattractive." Kraft said it expects pretax cost savings of at least $675 million a year by the end of the third year after the merger is completed. Kraft had a deadline imposed by U.K. regulators to make a final takeover offer for the British candy and gum maker by the end of Tuesday. The $19 billion price tag could put an end to efforts by Hershey ( HSY) to make a run at Cadbury. Reports over the weekend said Hershey was planning to bid at least $17.9 billion for Cadbury. Hershey has until Saturday to decide if it wants to launch a bid. -- Reported by Joseph Woelfel in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.