LONDON -- Cadbury Schweppes plc said in a statement that the separation of its confectionery business and Americas Beverages business is progressing well and that it continues to pursue a twin track process of either a sale or demerger.
It added, The sale process is actively underway, and following expressions of interest, we now believe that a sale is the more likely outcome.
Following separation, the business will be renamed Cadbury plc.
It also announced the strategy for Cadbury plc after its separation [image-nocss] from Americas Beverages. We believe the business has significant under-exploited potential. Our new strategy aims to leverage our scale and category benefits to realize this under-exploited potential.
Over the next four years, its aim is to simplify its organizational structure to allow better execution of a more focused commercial strategy.
According to the company, the Cadbury confectionery business is now the world's largest confectionery business with a 10% share of the global confectionery market; has No. 1 or No. 2 positions in nearly half of the world's top 50 confectionery markets; is the only confectionery business with strong brands and competitive positions in all three confectionery categories of chocolate, gum and candy; has a significant exposure to faster-growing categories with gum and other "better-for-you" products accounting for around 30% of our total portfolio; and has the largest and most broad-based emerging markets presence, accounting for around one third of total revenues.
To help drive further revenue growth, under its category management structure, the company will focus its resources on top markets in each category where it will develop and launch innovative products. In innovation, we will reduce the number of smaller, non-advantaged innovation projects and increase the resources behind larger innovations from which we can derive competitive advantage, said the company.
We will also increase our focus on our biggest, most advantaged brands, and on our largest customers. As part of this focus, we will also rationalize some of the smaller brands and products in our portfolio, accounting for around 5% of our confectionery revenues. We will focus our resources on our top 13 brands and will manage five brands which have the strongest potential in existing and new markets (Cadbury, Trident, Halls, Green & Black's and The Natural Confectionery Company) on a global basis.
The new confectionery business had been reorganized into four broadly equal-sized regions (from three): Americas; Asia Pacific; Britain, Ireland, Middle East and Africa (BIMA); and Europe (including Russia and Turkey).
The Presidents of these regions are Matt Shattock, president for BIMA; Chris Van Steenbergen, president for Europe; Jim Chambers, president for the Americas; and Rajiv Wahi, president for Asia Pacific.
Our category structure, which we put in place in late 2006, will be further embedded in our regions to ensure excellence of execution and increase efficiency. We will also cluster businesses within regions to reduce the number of business units and increase focus, and co-locate global, regional and business unit head offices to reduce building and back office costs. Further savings will be achieved through allocating dual roles to functional leaders to reduce headcount and increase efficiency of decision making, it said.
Cadbury Schweppes said Tuesday it plans to close 15% of its confectionary factories by 2011, cutting about 7,500 jobs, and will likely sell the U.S. unit that makes 7-Up, Dr Pepper and Snapple as it focuses on its candy and gum businesses, added the Associated Press.
The company had announced in March that it planned to separate its drinks and candy businessesunder pressure from investors led by U.S. billionaire Nelson Peltzbut had not indicated whether it would sell the beverage business or spin it off to shareholders.
A sale would be expected to yield 7 billion pounds to 8 billion pounds ($14 billion to $16 billion), Jeremy Batstone-Carr, analyst at Charles Stanley in London, told AP.
Friday was the deadline for expressions of interest. Private-equity groups and the Canadian bottler Cott Corp., which makes private-label soft drinks for retailers like Wal-Mart Stores Inc., are thought to be among the possible bidders.
Cadbury, which also has products such as Dairy Milk chocolate and Trident Gum, had been under increasing pressure to revert to its origins as a confectionery company by spinning off the U.S. drinks business, particularly since it sold its European soft drink unit in 2005.
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