Cadbury US beverage sale expected soon

By Neil Merrett

- Last updated on GMT

Related tags: Cadbury schweppes, Dr pepper snapple group

A proposed 7.5bn sell off of Cadbury Schweppes US beverage
operations could be imminent, according to press reports in the UK.

An unnamed source close to the deal has suggested that the company has set a deadline of tomorrow for bids from a number of consortiums thought to be interested in the acquisition, according to The Times newspaper. The comments comes as the beverage and confectionery giant, continues to reorganize its global operations to increase profitability in an increasingly competitive business environment. Cadbury had suggested an earlier possibility of separating the division, which is responsible for the manufacture of leading soft drinkbrands like Dr Pepper; Snapple, and Clamato, to operate as a spin off business. However, this option is thought to be increasingly unlikely following a growing interest from a number of leading private equity firms, according to the paper's source. These two rival consortiums are thought to involve players like the Blackstone Group and Lion Capital. Representatives for both bids were unable to discuss any potential dealings with the company. Likewise, Cadbury Schweppes also declined to comment on the reports, and said it would update its position on the June 19. Just last week, the company announced the sale of some of its businesses in Australia, Canada and Italy, raising over 45m (66.4m) towards its 2007 disposal target, whilst at the same time acquiring Turkish confectioner Intergum for $450m (333m). This activity follows on from an announcement in March this year that Cadbury Schweppes would separate its confectionery and US soft drinks businesses. Cadbury chief executive Todd Stitzer said at the time that this would allow the company to examine its options in a bit to boost the performance of its confectionery business, including a detailed review of costs. Since 1999, Cadbury has sold beverages businesses in about 180 markets. In 2006, it sold beverage operations in Europe, Syria and South Africa for a total of about 1.4bn.

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