Cadbury to sell beverages unit, slash jobs
By Our Corporate Bureau | 20 Jun 2007
London: Cadbury Schweppes, the biggest confectioner in the world, said today that it plans to sell the United States beverage unit that made Dr Pepper, Snapple and 7-Up and also slash up to 7,500 jobs in order to become more profitable.
Cadbury said it had received "expressions of interest" for the drinks unit, but did not provide further details. Cadbury's moves are intended to increase its margins, which have lagged behind those of rivals Hershey and Wm. Wrigley Jr.
Cadbury has received offers from at least three bidding groups that include the private equity firms Bain Capital Partners and Blackstone Group, and Cott, a Canadian company that makes private-label drinks for retailers like Wal-Mart Stores, according to market sources.
The restructuring would allow Cadbury to increase revenue up to 6 per cent a year, raise its margins to about 15 per cent from 10 per cent, lift dividends and improve returns from the capital it invests.
Following the separation, Cadbury will drop Schweppes from its name. Cadbury's American drinks business controls about 15 per cent of the $70 billion American market for carbonated soft drinks and ranks behind Coca-Cola and PepsiCo, according to the Beverage Digest.
