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Cadbury Schweppes likely to sell drinks business


March 3, 2008
By Canadian Pizza

Cadbury Schweppes PLC said June 19 it plans to close 15
per cent of its confectionery factories by 2011, cutting about 7,500
jobs, and will likely sell the U.S. unit that makes 7-Up, Dr Pepper and
Snapple as it focuses on its candy and gum businesses.

Cadbury Schweppes PLC said June 19 it plans to close 15 per cent of its confectionery factories by 2011, cutting about 7,500 jobs, and will likely sell the U.S. unit that makes 7-Up, Dr Pepper and Snapple as it focuses on its candy and gum businesses.

Private equity groups and the Canadian bottler Cott Corp., which makes private-label soft drinks for retailers like Wal-Mart Stores Inc., are thought to be among the possible bidders.

The company had announced in March that it planned to separate its drinks and candy businesses – under pressure from investors led by U.S. billionaire Nelson Peltz – but had not indicated whether it would sell the beverage business or spin it off to shareholders.

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While the company said that it was still pursuing “a twin track process,” it appeared that the business would be sold. “The sale process is actively underway and, following expressions of interest, we now believe that a sale is the more likely outcome,” the company said.

The company, which employs about 50,000 people in its confectionery business, has 35 confectionery sites across Europe, the Middle East and Asia, and 59 other bottling and manufacturing sites worldwide.

Cadbury, which also has products such as Dairy Milk chocolate and Trident Gum, had been under increasing pressure to revert to its origins as a confectionery company by spinning off the U.S. drinks business, particularly since it sold its European soft drink unit in 2005.

The company also announced confectionery revenue in the first quarter rose nine per cent, led by a 15 per cent gain in the United States and Latin America.