Cadbury Schweppes plc announced today that it has acquired 100% of the branded chewing gum business of Dandy from the Bagger-Sørensen family in Denmark for £201m (US$307.9m).
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Dandy is the fourth largest chewing gum manufacturer in the world. Combined with Cadbury Schweppes’ existing chewing gum businesses, this acquisition makes Cadbury Schweppes the second largest player in the European chewing gum market, with No 1 positions in France, Denmark, Belgium and Switzerland and No 2 positions in Russia, Sweden, and the Netherlands. Cadbury Schweppes also has leading positions in several other markets, most notably Turkey, Argentina and China.
Dandy’s branded chewing gum business includes the brands Stimorol, V6 (Western Europe) and Dirol (Eastern Europe, Central Asia and the Middle East). It has sales and distribution operations in Western Europe, Russia and the CIS, and state-of-the-art production facilities in Novgorod, Russia. These brands complement Cadbury Schweppes’ chewing gum portfolio, which includes the brands Hollywood (France), Beldent (Argentina), Sportlife (China) and Kent (Turkey).
Additionally, for £23m, Cadbury Schweppes is acquiring a 25% interest in Dandy’s contract manufacturing facilities based in Vejle, Denmark, which supplies Cadbury Schweppes’ Hollywood as well as Dandy in local markets. The transaction also includes a 50% interest in world-class R&D facilities in Vejle.
John Sunderland, CEO of Cadbury Schweppes, said, “Dandy significantly extends our participation in chewing gum, one of the fastest growing and most profitable confectionery categories. With this acquisition we are broadening our position in the European confectionery market, building on our strong businesses in France, Poland and Russia. Dandy also brings significant R&D expertise in the fast growing ‘functional’ confectionery market.”
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By GlobalDataHolger Bagger-Sørensen, chairman of Dandy, said, “Under Cadbury Schweppes’ ownership Dandy will undoubtedly become an even more powerful international business.”
Dandy’s branded business had a reported turnover of £164m in 2001. The consideration represents 2001 EBITDA and sales multiples on Dandy’s branded business of 7.7x and 1.2x respectively. Cadbury Schweppes’ earnings will not be impacted in the first year but will benefit thereafter. The transaction will be funded from Cadbury Schweppes’ existing debt facilities. Regulatory approval will be required from several European competition authorities. The transaction is anticipated to close in the Q3 2002.
