One of the most iconic brands in UK food and drink is to come under foreign ownership after Cadbury accepted an improved bid by US suitor Kraft Foods.

Cadbury’s board has given its backing to a new bid of 840p a share, with the revised offer valuing the dairy milk maker at around £11.5bn.

The new offer will consist of 500p per share in cash, with the remainder made up in Kraft shares.

“We believe the offer represents good value for Cadbury shareholders and are pleased with the commitment that Kraft has made to our heritage, values and people throughout the world,” said Cadbury chairman Roger Carr.

“We will now work with the Kraft management to ensure the continued success and growth of the business for the benefit of our customers, consumers and employees.”

Kraft chief executive Irene Rosenfeld hailed the “immediate value certainty and upside potential in the combined company”.

“We have great respect for Cadbury’s brands, heritage and people [and] believe they will thrive as part of Kraft,” she said. “For Kraft it transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline.”

As well as bringing an end to more than 150 years of independence for one of the UK’s best-loved brands, the news marks the climax of months of jousting between the two companies.

Cadbury had issued a series of strongly-worded public attacks on the US group, which Carr slammed for its “low-growth business model” and “derisory” opening bid. Meanwhile, trade union Unite has warned that thousands of jobs could be at risk under Kraft.