Blog: Cadbury looks sweet after drinks sales
Olly Wehring | 24 November 2005
Having confirmed as recently as September that it was looking to offload its European Beverage unit, Cadbury Schweppes confirmed this week that it has sold its business to a consortium led by Blackstone Group International and Lion Capital LLP for EUR1.85bn (US$2.17bn).
Although this sale had been widely expected prior to Cadbury Schweppes’s official confirmation almost three months ago, the speed in which a buyer has been found impressed even the company’s CEO. “I am delighted that within such a short time we have achieved a firm offer for Europe Beverages,” Todd Stitzer said. And with estimates early this year pricing the unit at US$2bn, Stitzer was also suitably “delighted” at what he got for it.
The price, at around 9.5 times the unit's forecast EBITDA for 2005, is just ahead of many analyst estimations and above recent transactions in the soft drinks sector - the UK soft drinks group Britvic is expected to float next month at 7.5 times.
However, the threat as late as last week that PepsiCo might enter into the fray and drive the asking price up will surely mean Blackstone/Lion will settle for what they had to pay for such a quick deal. The questions now are what next for Cadbury and how will Blackstone/Lion fair with its new purchase?
Lyndon Lea, founding partner of Lion Capital, the former European arm of US-based Hicks Muse Tate & Furst, believes the acquisition will close early next year. And she was quoted saying she expected to hold on to the company for three to five years, investing in marketing and innovation – all good news for the brands and the sector.
Cadbury, meanwhile, is now free to pay down some of its debt and concentrate on its more successful confectionary and Dr Pepper/Seven Up businesses. However, the divestment of the under-performing European subsidiary may now make it more attractive to potential takeover attempts - commentators are already suggesting the mighty US group Kraft may take an interest.
Philadelphia’s soda tax came into force on Sunday, and is reportedly causing a stir in the city's check-out aisles....
Earlier this month, I was most-kindly invited by Accolade Wines to visit the Royal Albert Hall in London. The reason? They wanted to see a tennis great in action, and then give them a guided tour thro...
Do you like whisk(e)y? And, I mean, really like whisk(e)y? Are you at a loose end in the first half of 2017? If so, then I've found just the job for you....
Most of the time, changes at the top of a company present themselves in press releases, stock exchange filings or responses from a spokesperson....
- What's coming up in spirits in 2017? - Comment
- What's coming up in beer in 2017? - Comment
- When BRIC markets go horribly wrong
- Interview, Philip Gregan, New Zealand Winegrowers
- Remy Cointreau's bellwether Q3 - analysis
- Diageo closes spirits e-commerce portal in UK
- A-B InBev acquires Spain's Cervezas La Virgen
- Home entertaining offers drinks opp's - Diageo
- Former Stoli Group CEO joins Perfect Vodka owner
- Diageo mulls United Spirits stake buy - report
- Global vodka insights - market forecasts, product innovation and consumer trends
- The Next Seven Big Beverage Markets
- Global Cognac insights - market forecasts, product innovation and consumer trends
- Global gin insights - market forecasts, product innovation and consumer trends
- Opportunities in Craft Spirits