Why did cadbury demerger schweppes

The firm's Americas Beverages unit is to split off, leaving the confectionery arm with brands such as Dairy Milk chocolate and Trident chewing gum.

Reports on Thursday suggested that private equity groups had expressed an interest in buying the drinks arm. Cadbury Schweppes said it would provide more information on the demerger with its trading update on 19 June. Cadbury Schweppes shares closed up 2.

But Cadbury's chief executive Todd Stitzer said that the demerger was being discussed long before Mr Peltz bought his stake. Easter Egg recall In recent months, the company's confectionary division has suffered a string of setbacks. Thousands of chocolate bars were taken off the shelves in the UK after the Food Standards Agency learned that traces of salmonella had been found in some chocolate bars. Batches of Easter Eggs have been recalled because they were not labelled as being unsuitable for those with nut allergies.

Cadbury's is the third largest carbonated soft drinks group in the world by sales volume, behind Coca-Cola and Pepsi. The Cadbury Group merged with Schweppes in Low graphics Accessibility help. UK confectionery sales rose 13 percent after a strong recovery from its previous third-quarter in which was hit by hot summer weather and a salmonella-related recall.

The group also warned commodity costs, such as liquid milk, are expected to be around 5 to 6 percent higher for both its confectionery and beverage operations but hopes to offset these increases with price rises for its products. Cadbury said at its half-year results that confectionery operating margins dipped 0. Stitzer declined to comment on media reports that U.

Business News Updated. Investors have petitioned the board for years to separate the international sweets, gum and chocolate operation from the US drinks businesses but few had anticipated this level of expense. Much of the cost relates to tax and the complexities of the first UK-to-US demerger and listing since the break-up of the Hanson conglomerate 12 years ago. This seems a high price for a bit of focusing. Though the management had been mulling a break-up for a long time, discussions came to a head a year ago after the US activist investor Nelson Peltz appeared on the share register and made public demands for a split.

Within days the chief executive, Todd Stitzer, unveiled his team's separation plan.