CADBURY SCHWEPPES yesterday moved to tighten its control over its soft drinks distribution in the United States when it paid $691m for the Dr Pepper Bottling Company of Texas. The deal, first hinted at a month ago, has been struck as a joint venture with Cadbury's US partner, the Carlyle Group.
The acquisition, which includes the assumption of $408m in bank debt, will create the largest independent soft drinks bottler in the United States when combined with The American Bottling Company, also owned by Cadbury and Carlyle.
The move is aimed at tightening Cadbury's control on bottling and distributing its own brands in the US in a sector dominated by Coca-Cola and PepsiCo owned bottlers.
Cadbury recently agreed to sell most of its soft drinks businesses outside continental Europe and the US to Coca-Cola in a deal worth about $1.1bn.
"It's good news for the company in that it's further consolidation in the independent bottling system, it brings in industry heavy weight Jim Turner (head of the Dr Pepper bottling company) and does not involve a significant equity investment." said CSFB analyst Charlie Mills.
Cadbury Schweppes said it will own 40 per cent of the combined group, the Carlyle Group 53 per cent and the remainder will be held mainly by Jim Turner and management.
It will bottle and distribute 58 per cent of Dr Pepper/Seven Up's volume in the independent bottling system and 24 per cent of total Dr Pepper/Seven Up volumes.
Cadbury's shares closed 14p higher at 406.5p.
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