Cott Corp. is rumoured to be in talks with private equity firms to merge with the beverage arm of Cadbury Schweppes.

A report in today's (13 April) Wall Street Journal claimed that the discussions were taking place, citing a source familiar with the talks. Trading in Cott shares have subsequently been suspended in Toronto today.

The paper also cited people familiar with the situation as saying that several private equity firms are considering a bid for Cadbury's brands, which include Dr. Pepper and 7 Up.

No-one was available for comment at Cott when contacted by just-drinks today.

The merger of Cadbury Schweppes with the retailer brand soft drink manufacturer would create a third-placed rival to The Coca-Cola Co. and PepsiCo.

Last month, UK-based Cadbury Schweppes said it will separate its Americas drinks operations from its confectionary business. The company said it was "evaluating the options for separation" and would shed further light on its plans in June.