Cadbury Schweppes agrees to buy rest of Dr. Pepper/7-Up

Cadbury Schweppes agrees to buy rest of Dr. Pepper/7-Up

The board of Dr. Pepper has unanimously accepted the offer by London-based soda and candy giant Cadbury Schweppes P.L.C. to acquire the remaining 74% of Dr. Pepper/Seven-Up Cos. that it does not already own.

The merger which is expected to reach completion by the end of March will move Cadbury, the supplier of Schweppes and Canada Dry beverages, Crush, Sunkist fruit sodas, Mott’s juices and A&W root beer, into third position in the $49-billion U.S. soft drink market giving it a 16 percent market share. At present Coca-Cola controls about 42% and Pepsi has 31% of the soft drink market.

The proposed deal received a warm welcome on Wall Street with Dr. Pepper stock rising $2 a share last week to $32.50, a record closing on the New York Stock Exchange while Cadbury’s American depository shares gained $1.125 to $26.75.

Cadbury announced it would finance the transaction not only by borrowing but also by issuing new Cadbury Schweppes shares in Britain worth an estimated $794 million. There are speculations that after the deal, Cadbury will vigorously increase its Mott’s juice-drink business and that it will make a debut into the sports-drink sector to compete with Gatorade and also pursue the ready-to-drink iced tea market.

Copyright Quality Services Company Feb 6, 1995

Provided by ProQuest Information and Learning Company. All rights Reserved