Cadbury shops for £350m gum deal

Cadbury Schweppes is set to expand its chewing gum business with the £350m acquisition of Dandy, a Danish business best known for its Stimorol brand. The deal, planned by Cadbury's chief executive, John Sunderland, is expected to be announced in the next few weeks.

Dandy is a family controlled company whose Stimorol brand has become well known in Europe. It has also been expanding in Russia where, together with Wrigley, it controls 90 per cent of the chewing gum market.

Dandy already has a distribution agreement with Hollywood, the French chewing gum business bought by Cadbury from Kraft Foods two years ago. Dandy had sales of £180m last year.

Cadbury has been keen to expand further into chewing gum, where sales growth is higher than in its main businesses of confectionery and soft drinks. The group has also been linked with Adams, the US confectionery group which makes the Dentyne and Trident brands. Adams is owned by the maker of Viagra, Pfizer, and valued at about $4bn (£2.8bn). Cadbury declined to comment on its interest in Dandy yesterday.

Cadbury's move would come as Wrigley, the American giant which has a 50 per cent share of the world chewing gum market, is planning to diversify into making sweets. Wrigley plans to start making mints and other small sweets. The diversification is a major departure for the usually conservative group which is listed in the US but still controlled by the Wrigley family.