US: Cadbury Schweppes confirms drinks spin off
Cadbury Schweppes, the world's largest confectioner, is to spin off its US drinks arm having failed to find a buyer for the company.
The drinks business, which makes brands including Dr. Pepper and 7-Up, is to be listed on the New York Stock Exchange. Americas Beverages generates over 80% of its revenues and profits in the US, Cadbury said.
The UK-based group added that the the demerger would not be completed before the second quarter of 2008.
In March, Cadbury said it would either sell or demerge its Americas Beverages operations. At that stage, it appeared a sale was the more likely outcome but disruption in the US debt financing markets hampered the search for a buyer, leading the company to opt for a spin-off.
Cadbury chairman Sir John Sunderland said: "With an acceptable sale unlikely in the foreseeable future, the board believes it is prudent now to focus on demerging our Americas Beverages business."
Sunderland also announced his intention to resign as chairman but is to remain in place until the spin-off is completed. He will oversee the demerger process and the setting-up of new boards at the two companies, and officially step down at the Cadbury AGM next spring.
Cadbury will now proceed with previously outlined plans for its confectionery business under its new name Cadbury plc.
The company confirmed that the executive team of Cadbury plc will continue to be led by Todd Stitzer as CEO with Ken Hanna as chief financial officer.
Larry Young, CEO of the American company's bottling operation, has been named as the new president and CEO of Americas Beverages, succeeding Gil Cassagne who is stepping down for personal reasons after 25 years with the company.
John Stewart is to continue as chief financial officer of Americas Beverages.
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