Cadbury scraps drinks sale plan
Thursday, 11 October 2007
Cadbury Schweppes has decided to spin off its North American drinks operation after "difficult" credit conditions hampered plans for a sale, reports BBC.
The company said it would now focus on listing the business - which has brands such as Dr Pepper, 7Up and Snapple - on the New York Stock Exchange.
The demerger is expected to be completed in mid-2008.
Cadbury also said that it had enjoyed strong confectionery sales during the third quarter, with revenue up 10%.
The UK firm behind Britain's much-loved Dairy Milk chocolate bar has been searching for a buyer of its drinks arm since March.
But the turmoil in the financial markets over the summer hurt the ability of private equity firms to borrow money from banks to finance their purchases.
This hit the sale of Cadbury's beverage business, which was reportedly worth up to £7bn as a separate entity.
"While the board continues to be committed to the principle of maximising shareholder value, it does not believe current market conditions will facilitate an acceptable sale process in the foreseeable future," the firm said.
The company said it would now focus on listing the business - which has brands such as Dr Pepper, 7Up and Snapple - on the New York Stock Exchange.
The demerger is expected to be completed in mid-2008.
Cadbury also said that it had enjoyed strong confectionery sales during the third quarter, with revenue up 10%.
The UK firm behind Britain's much-loved Dairy Milk chocolate bar has been searching for a buyer of its drinks arm since March.
But the turmoil in the financial markets over the summer hurt the ability of private equity firms to borrow money from banks to finance their purchases.
This hit the sale of Cadbury's beverage business, which was reportedly worth up to £7bn as a separate entity.
"While the board continues to be committed to the principle of maximising shareholder value, it does not believe current market conditions will facilitate an acceptable sale process in the foreseeable future," the firm said.