Cadbury to demerge Americas Beverages business
October 10, 2007
by FoodBusinessNews.net Staff
LONDON — Cadbury Schweppes announced it intends to demerge its Americas Beverages business.
The company announced in March that it would be splitting its confectionery and Americas Beverages business, and on July 27 said it would be extending the timetable for the sale of the Americas Beverages business "to allow bidders to complete their proposals against a more stable debt financing market."
However, the company has said that since then the debt market has remained difficult, and the company does not believe current market conditions will support an acceptable sale process in the near future. With those considerations in mind, the company has decided to demerge.
"This is a very exciting day for Americas Beverages," said Larry Young, who has been appointed president and chief executive officer. "We have a strong business and an established market position in the non-alcoholic beverages category. As an independent company, we are poised for continued success because of our preferred brands, our integrated business model and our heritage of innovation."
Cadbury said it will list the business on the New York Stock Exchange through an issue of shares to existing shareowners. The company does not anticipate that the demerger will be completed before the second quarter of 2008.
"It is the intention of the board to create two strong, well-managed businesses focused on profitable growth with efficient balance sheets," the company said. "This will enable shareholders to receive the benefit of any immediate cash surplus at the time of separation while ensuring the businesses are appropriately financed for their successful development and value creation in the longer term."
Mr. Young is taking over for Gil Cassagne, who decided to resign for personal reasons and pursue other interests. Mr. Young joined Cadbury in April 2006 through the company’s acquisition of the Dr Pepper/Seven Up Bottling Group, where he was president and chief executive officer. He most recently was president and chief operating officer at Cadbury Schweppes Bottling Group, a division of Cadbury Schweppes Americas Beverages.