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Last Updated: Monday, 21 November 2005, 11:59 GMT
Cadbury sells European drinks arm
Oasis and Orangina
Oasis and Orangina are two of the brands being sold
Confectionery giant Cadbury Schweppes has agreed to sell its European soft drinks business for 1.85bn euros ($2.2bn; 1.3bn).

It is being bought by private equity firms Blackstone and Lion Capital.

Cadbury's European Beverages brands include Orangina, Oasis, Schweppes, La Casera and TriNa.

For the deal to be completed, UK-based Cadbury will have to consult with employee representatives in France, Germany and Belgium.

It first announced its intention to sell off its European drinks arm back in September.

'Refocus'

The price being paid by Blackstone and Lion Capital is towards the upper end of analyst predictions.

Following completion of a deal, we will be able to focus on our faster growing confectionery and other beverage businesses
Cadbury's boss Todd Stitzer

Cadbury's European Beverages arm employs 3,000 people and has bottling plants in Germany, Spain, Portugal and Belgium.

Around 85% of its sales are in France, Spain and Germany, with a small amount of business in the UK.

Cadbury's sold the majority of its drinks business in the UK to Coca-Cola in 1999.

"I'm delighted that within such a short time we have achieved a firm offer for Europe Beverages at a price which reflects the quality of its brands and the strength of its management team." said Cadbury Schweppes chief executive Todd Stitzer.

"Following completion of a deal, we will be able to focus on our faster growing confectionery and other beverage businesses."

Takeover target?

Last month Cadbury warned that group-wide it was unlikely to meet its profit margin forecasts for this year.

Analysts broadly welcomed the sale, but some said a streamlined Cadbury's, which keeps its Dr Pepper and 7UP brands, may now find itself an attractive takeover target for such US firms as Kraft Foods or Hershey.

"This is a good price, it is hard to fault the logic of this perfectly sensible deal," said analyst Richard Workman at Oriel Securities.


SEE ALSO:
Cadbury to miss profit forecasts
06 Oct 05 |  Business
Cadbury enjoys 'strong' trading
26 Jul 05 |  Business
Cadbury boosted by upbeat outlook
23 Feb 05 |  Business
Cold weather cools Cadbury sales
24 Sep 04 |  Business


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