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 21 August 2008 21:14 BST

Cadbury to spin-off drinks unit

Wednesday, 10 Oct 2007 13:33
Cadbury's US drinks arm makes 7Up

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Cadbury Schweppes, the world's largest confectionary group, has abandoned plans to sell its US drinks unit.

In a statement today the company said it had decided to spin off the business due to "difficult" conditions on the credit markets hampering a sale.

The confectionary giant had extended the timetable for a sale on July 27th, in order to allow potential bidders more time to put together possible offers against the backdrop of a more stable debt financing market.

But Cadbury said its board had now determined that it was in the best interests of shareholders to spin off the American drinks unit, the business behind brands such as Dr Pepper and 7Up, and list it on the New York Stock Exchange.

"With an acceptable sale unlikely in the foreseeable future, the board believes it is prudent now to focus on demerging our Americas Beverages business," said Cadbury chairman Sir John Sunderland.

Cadbury said the process of listing the Americas Beverages business in the US would require "a number of approvals and rulings", with the company not expecting to complete the demerger until the second quarter of 2008.

It added that it had decided to restructure the Americas Beverages business, with the expected loss of 470 jobs. Cadbury said the plans were expected to deliver annual cost savings of £35 million.

Meanwhile the company behind brands such as Dairy Milk and Trident gum has said that its confectionary business experienced a strong third quarter, with revenues up by ten per cent.

Cadbury said an "excellent" performance by its gum brands and improved chocolate sales, driven by increased marketing and promotional investment, were responsible for the rise.

In the UK chocolate sales benefited from the cooler summer weather and a "strong recovery" from last year's product recall, the company revealed.End of story


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