LONDON : US competition authorities have approved a bid by Kraft Foods to acquire British confectioner Cadbury, the US food giant said Tuesday in a note to the London Stock Exchange.

On Monday Cadbury management rejected the takeover offer, describing the formal bid as "inadequate" and ramping up its defences.

The European Union is to rule on the takeover bid by January 6.

The US group launched its hostile move last month and has been repeatedly snubbed by Cadbury management.

Earlier this month, Kraft appealed directly to shareholders with details of its cash and shares bid, now worth 9.9 billion pounds (11 billion euros, 16.1 billion dollars), down from an initial 10.2 billion pounds.

Shareholders have until January 5 to accept the Kraft offer.

Kraft is the world's second biggest snacks group after Nestle. Cadbury is meanwhile the second largest confectionery company behind Mars.

A tie-up between Kraft and Cadbury would merge leading Kraft brands Oreo biscuits and Maxwell House coffee with Cadbury's Dairy Milk chocolate and Trident chewing gum.