Cadbury Schweppes is considering buying La Casera. Spanish soda producer La Casera is aiming to become part of a stronger soft drinks network, but until now has had difficulty attracting much interest. Cadbury Schweppes and La Casera could both benefit from the increased scale the arrangement offers but would still face a major challenge against Coca-Cola's dominance in Spain.

Cadbury is on the acquisitions trail again. Talks with Pernod Ricard over the purchase of Orangina aren't even completed yet, but Cadbury already has its eye out for more than just fizzy orange. The British confectionary and soft drinks manufacturer is now mulling the potential benefits of buying itself a majority position in soda company La Casera.

"Cadbury Schweppes confirms that it is in discussions with the Spanish soft drinks producer, La Casera, which may or may not lead to the acquisition, for cash, of that business," Cadbury announced on Tuesday.

La Casera began arranging a possible sale last year, after entering the black in 1999 with profits of E6.17 million. The company sells E84 million worth of soft drinks each year, accounting for nearly 10% of the Spanish market, but has seen its market share fall over recent years. La Casera was aiming for a strategic alliance, rather than an outright sale. The aim was to set up a major soft drinks group in Spain, France and Portugal, in which the chosen party could buy a controlling share. But finding interested parties hasn't been easy: Coca-Cola, Pepsi, Leche Pascual and Puleva all turned down the sales proposal. Buyers were deterred by La Casera's high asking price and old-fashioned image.

Cadbury Schweppes has far more to gain from the deal than rivals such as Coca-Cola, which already controls 59% of the Spanish market. The British group already operates in Spain and could benefit significantly from the scale that the purchase of La Casera would allow. Trying to win back market share from soft drinks giants Coca-Cola and Pepsi will still be a major challenge for La Casera, alliance or not, but if the Spanish company can get Cadbury's weight behind it the odds will at least be better.

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