Cadbury Schweppes plans to separate its confectionery and Americas Beverages business to maximize shareholder value, the company said yesterday.
The company will retain its confectionery business, the largest in the world with a 10% global market share, and spin off its U.S. Americas Beverages business, which includes the Dr Pepper, 7 UP, Sunkist and A&W brands.
The move will enable management to focus on generating revenue growth, increasing margin and enhancing returns for shareholders, the company said.
“This decision is of great significance for the board and the company,” said Chairman Sir John Sunderland, in a statement. “We believe now is the time to separate and give both management teams the focused opportunity to extract the full potential inherent in these excellent businesses.”
Evaluations for the split are still underway with Cadbury planning to provide further information in June.
Talks of separating the business had reportedly been in discussions for months. Some reports suggested that the recent announcement that activist investor Nelson Peltz had bought a 3% stake in the company may have accelerated the process.
The confectionery business includes such brands as Cadbury, Trident, Halls and Dentyne.
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