Cadbury Schweppes to complete demerger
March 11, 2008
by FoodBusinessNews.net Staff
LONDON — Cadbury Schweppes P.L.C. expects to complete the demerger of its confectionery and Americans Beverage business into Cadbury P.L.C. and Dr. Pepper Snapple Group, Inc. on May 7.
Cadbury has been working to change its business structure for a year now, first announcing its intentions to separate the confectionery and Americans Beverages businesses last March and confirming the separation would take place via a demerger in October. The company looked into selling the Americans Beverages business, but as a result of volatility in the debt markets and current market conditions, the company decided a demerger was the best option.
The company now is announcing D.P.S.G. has signed credit agreements and both businesses have investment grade capital structures.
Right before the demerger, Cadbury Schweppes expects net debt to be about ₤3.2 billion ($6.4 billion). D.P.S.G. will be financed with new debt that will be used to repay a portion of the current debt. Cadbury P.L.C.’s borrowing requirements will be funded from existing borrowing facilities. Cadbury P.L.C. will have a new net debt of about ₤1.65 billion, and D.S.P.G. will have a net debt of about $3.8 billion.
In return for Cadbury Schweppes Ordinary Shares, shareholders will receive ordinary shares in Cadbury P.L.C., which will be listed on the London Stock Exchange, and shares of common stock in D.P.S.G., which will be listed on the New York Stock Exchange.
Shareholders will vote on approval for the demerger at a General Meeting of Cadbury Schweppes on April 11 in London. By mid-May, the company expects that Cadbury Schweppes no longer will be listed as a company.