Cadbury Schweppes completes demerger

Posted by Daniel Palmer on 8th May 2008

The Cadbury Schweppes demerger was officially completed last night almost 14 months after the announcement of the demerger was made. The split means that the confectionery unit will be separated from its North American beverage unit which is now to be known as Dr Pepper Snapple Group (DPS). The two companies, Schweppes and Cadbury, initially merged to create Cadbury Schweppes in 1969.

The demerger of Cadbury from their North American beverage sector means that Australia is now the only country where Cadbury maintain a drinks operation.

At the time of the initial announcement Cadbury’s confectionery unit held a 10% global market share, making them the world’s largest confectionery business in the world. They held the title of number one or two confectionery company in almost half of the world’s largest confectionery markets. With the recent merger of Mars and Wrigley, though, their title as the world’s largest confectionery company has been challenged.

Chief Executive Officer Todd Stitzer indicated the demerger was initiated to allow the management teams of the confectionery and beverage divisions greater opportunity to expand and develop their businesses. “Separating these two great businesses will enable two outstanding management teams to focus on generating further revenue growth, increasing margin, and enhancing returns for their respective shareowners,” he said.

Larry Young, president and CEO of DPS, was pleased that the demerger had been completed and looking forward to a prosperous future.”Today marks the beginning of a new era for our business. We have a strong and sustainable business model and can leverage our integrated system for future growth,” he stated. “We have confidence in the beverage industry and we are looking forward to seizing the opportunities as a stand alone company.”