Cadbury Schweppes to split its business

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Sunderland: “This decision is of great significance for the board and the company.”

Cadbury Schweppes announced in March that it is to separate its confectionery and American beverages divisions. The move, which follows the sale of Cadbury Schweppes' European soft drinks division for GBP1.4 billion (US $2.71 billion) at the start of 2006, has led to much speculation about the company's intentions.

Some analysts have pointed out that once separated, both businesses could become targets for private equity companies, such as Lion Capital and Blackstone Group, which bought Cadbury's soft drinks business in continental Europe last year.

The decision to separate the businesses followed the company's preliminary results announcement on February 20, and the plan was supported by major shareowners representing about 40% of Cadbury Schweppes shares. "This decision is of great significance for the board and the company," said Sir John Sunderland, chairman, Cadbury Schweppes. "It has been facilitated by acquisitions and disposals over the last decade designed to create a strong and potentially independent Americas Beverages business. In the same time, we have built the world's largest confectionery business. We believe now is the moment to separate and give both management teams the focused opportunity to extract the full potential inherent in these excellent businesses."

Todd Stitzer, chief executive officer, added: "Separating these two great businesses will enable two outstanding management teams to focus on generating further revenue growth, increasing margin, and enhancing returns for their respective shareowners."

The Americas Beverages business has a portfolio of carbonated soft drinks including Dr Pepper, 7UP, Sunkist and non-carbonate soft drinks including Snapple, Mott's, Hawaiian Punch and Clamato. The confectionery side of the business has products including Dairy Milk chocolate and Trident Gum.

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