Shareholders in Cadbury Schweppes voted in favour of demerging the company’s North American food and drink businesses at its AGM on Friday (11 April).
The confectionery giant, which faced strong opposition from investors to separate its two businesses, originally planned to sell its beverage unit before it was foiled by turmoil in the global credit markets.
With 99.39% of Cadbury Schweppes shareholders voting for approval of the demerger, the remaining company will now be known as Cadbury PLC and shareholders will receive shares in the beverage company Dr Pepper Snapple Group (DPSG).
“Today’s decision is a key step in the strategic evolution of the company towards the creation of two world leading consumer goods companies,” said chairman Sir John Sunderland. “I am confident that the focus allowed by their separation will translate into improved performance and rewards for shareowners in the years ahead.”
In last week’s sales update, Cadbury said it was “pleased” with Easter despite a much shorter selling season, yet the decision to limit its participation in aggressive seasonal Easter discounting impacted on the company’s market share.
It posted a 7% increase in revenue for the first quarter as a result of the company’s chewing gum launches and a 3% growth in revenue for its North American beverages unit.