London, Jan 19 (DPA) Britain's oldest chocolate maker Cadbury and US food giant Kraft Foods confirmed Tuesday that they were 'finalising' the terms of a takeover deal reported to be worth 11.5 billion pounds ($19 billion).

In a statement to the London stock exchange, the two companies said an official announcement of the historic deal would be made shortly.

Earlier, the BBC reported that Cadbury, the iconic British confectioner founded 180 years ago, had agreed to the improved offer after a 'frantic night of negotiations'.

Cadbury had initially bitterly resisted the approaches by the US giant, saying it 'seriously undervalued' the British firm.

In an 11th-hour deal, Kraft raised its bid to 11.5 billion pounds - exceeding market expectations, analysts said.

Kraft, whose brands include Oreos and Dairylea is now prepared to pay between 840 and 850 pence per share, reports said.

Cadbury had snubbed Kraft's previous offer of 769 pence as 'derisory'.

In December, Kraft filed a hostile takeover bid for Cadbury, after the British company's board rejected a 10.4-billion-pound offer.

Cadbury's management attempted to mobilise US chocolate maker The Hershey Company and Italy's Ferrero SpA to counter Kraft's offer, but failed to get sufficient finance.

Kraft's brands range from Philadelphia Cream Cheese to Milka chocolate, while Cadbury produces its signature Dairy Chocolate.

The EU's competition watchdogs are expected to order Cadbury to sell part of its chocolate business in Eastern Europe if the merger goes through.

Kraft and Cadbury's joint sales would amount to some $72 billion, closing up to world market leader, Switzerland's Nestle SA.

Nestle is taking over Kraft's frozen pizza unit, which the US company sold to be able to finance the Cadbury deal.

However, the deal comes with risks for Kraft, which is facing resistance from stakeholders, including Warren Buffet's Berkshire Hathaway, the company's largest shareholder, who worry that Kraft is paying too much for Cadbury.