Top > Business > 2007 > March > 2007-03-27

Cadbury Schweppes to Split

Cadbury Schweppes announced Thursday, it plans to split into two separate firms, Schweppes ? a company focused on the sale of drinks and Cadbury ? a confectionary. The move came only a few days after Nelson Peltz bought shares in the company, raising speculations of a take-over. Todd Stitzer, the company`s CEO said in a statement: "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 move follows a meeting of the company`s major share holders, who were fro the plan.

The company, which manufactures, Dairy Milk, Trident gum, Dr Pepper, Snapple and 7UP, said it will announce the workings of the split, in June. The company currently holds 10% of the World`s candy market, making it the World`s largest candy manufacturer. The company announced last month that its profits in 2006 have gained 9% from 2005, although it did suffer a publicity fiasco, after it had to pull one million chocolate bars off shelves across the UK for fear of Salmonella contamination.

The London Times reported that Leon Capitol and Blackstone were considering purchasing Cadbury`s drink division. According to the report each company plans to issue a different offer for the company, estimated to be worth $12.5-15.5 billion. Peltz was announced Thursday as a shareholder activist. Peltz currently owns 2.98% of the company. On Friday, Cadbury`s stock reached 602 pence a share, setting the company`s market value at $24.2 billion.