Cadbury scales back pounds 1.2bn drinks sale to Coca-Cola

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The Independent Online
CADBURY SCHWEPPES was yesterday forced to scale back the pounds 1.2bn sale of parts of its soft drinks business to Coca-Cola after running into serious regulatory hurdles in several European countries.

The company also indicated that the deal had fallen foul of heightened trade tensions between the US and Europe following the recent disputes over bananas and beef hormones.

Under the revised deal, the value of the transaction has been cut from pounds 1.2bn to pounds 687m and Cadbury Schweppes' soft drink interests in 20 European countries have been excluded from the agreement.

The deal, which involves the sale of the Schweppes, Dr Pepper, Canada Dry and Crush brands in all countries except the US, France and South Africa faced the greatest hurdles in Germany, Italy, Belgium and Spain.

John Sunderland, Cadbury Schweppes' chief executive, said it had decided that regulatory resistance in certain EU countries would have resulted in unacceptable delays in the deal.

The amended deal covers the rights to the brand in 100 countries, including the UK and Ireland, and Cadbury Schweppes said it expected approval in a substantial majority of them in July.

Separately, Cadbury Schweppes has put on hold the pounds 500m sale of other bottling and beverage businesses which serve its West European markets.

In particular, it will retain ownership of two concentrate plants in Ireland and Spain which it had planned to sell, raising about pounds 250m.

The businesses, which are still being sold to Coca-Cola, have tangible net assets of pounds 3m and made operating profits of pounds 40m in the year to 2 January 1999.