London-based Cadbury''s beverages unit in North America, which makes Dr Pepper, 7-Up, Snapple and Mott''s drinks, is a $14.2 billion (7 billion-pound) business.

Plans to spin off the US drinks unit comes after the seven-month search for a buyer was derailed by the credit market meltdown.

Following the demerger Cadbury would focus on its confectionery business, which includes Dairy Milk chocolate, Trident gum and Halls cough drops.

Cadbury''s confectionery sales rose 10 per cent in Europe after a strong third-quarter worldwide and a ``particularly good quarter in the UK", Stitzer said.

Cadbury decided to demerge its soft drinks business in March, and a sale to private equity buyers seemed most likely, but the debt market woes in late July forced an auction to be delayed.

The Cadbury board decided on an early demerger of the soft drinks business as the debt market was yet to recover and an acceptable sale price offer was seen unlikely to come in the foreseeable future, Stitzer said.

"We are very focused on a demerger and shares will be distributed to existing shareholders in a New York-listed beverages group," Stitzer said.

Post demerger, the beverages business would be led by Larry Young, chief executive of its bottling operation, as current head Gil Cassagne is resigning.

The restructuring is expected to lead to annual cost savings of 35 million pounds, including 470 job-cuts in the business. On the confectionery side the 10 per cent third-quarter underlying rise in revenue will give a 7 per cent rise for the first nine months of the year after a 6 per cent first-half rise.

Cadbury expects a 5 to 6 per cent rise in costs of commodities such as liquid milk to push confectionery and beverage prices.