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Wednesday, 24 May, 2000, 16:18 GMT 17:18 UK
Cadbury seeks French deal
Cadbury wants to increase its presence on the French market
Cadbury wants to increase its presence on the French market
Confectionary and soft drinks manufacturer Cadbury has confirmed that it is in talks with Kraft Foods to acquire its French gum and sweets business.

If the talks are successful and the deal goes through, Cadbury would gain a 16% share of France's confectionary market, the seventh largest in the world.

"Kraft Foods' strong brands would help us build a critical mass in the French sugar confectionary market and give us entry into the profitable chewing gum segment," said Cadbury's chief executive John Sunderland.

Kraft is the food subsidiary of US consumer goods giant, Philip Morris.

The acquisition would give Cadbury's Hollywood, Malabar and Tonigum chewing gums and Krema, Kiss Cool and La Vosgiennne sweets.

Hollywood is one of France's most popular chewing gums, with a 53% market share.

The move is part of a growing trend toward consolidation in the food industry.

Cadbury is also interested in buying the US biscuit manufacturer Nabisco, while rival Unilever is trying to buy Bestfoods.

Manufacturing unit

The company said the purchase would complement its existing French business, which includes Cadbury and Poulain chocolate products.

It would also give Cadbury a French manufacturing unit in St Genest.

Cadbury's gave no mention of what the acquisition price would be if the deal went through.

Karft's French business had revenues of 1.24bn French francs (110m) last year, and analysts estimated the deal was worth about 250m.

Cadbury said it did not expect to reach an agreement on the sale until it finishes consultations with employee councils.

The final deal would also require regulatory approval, the company said.

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See also:

16 Feb 00 | Business
Profits sweet at Cadbury
28 Jul 99 | The Company File
Cadbury's confident despite profits fall
24 May 99 | The Company File
Cadbury-Schweppes waters down Coca-Cola deal
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