DBRS, the credit rating agency, has confirmed the corporate rating for Cadbury Schweppes at "A", a stable trend following the announcement of the agreement to purchase Orangina from Pernod Ricard.

However, there would be significant rises in goodwill and interest charges for Cadbury, DBRS said, and the acquisition is not expected to contribute positively to earnings for over two years.

Overall though the proposed acquisition is viewed favourably, which is consistent with Cadbury's strategy of growing both the beverage and confectionary businesses through strategic acquisitions.

DBRS said: "Orangina's premium brand should be a good fit within Cadbury's brand portfolio and should materially strengthen its beverage operations, especially in continental Europe."

It continued: "While integration issues may arise, these should be manageable and opportunities to increase revenues and achieve cost synergies should be available as Orangina and its facilities are integrated into Cadbury's established distribution and bottling network."

DBRS said of the acquisition, which will include the Yoo-Hoo and Pampryl brands as well, that although it will be entirely debt-financed, Cadbury's "financial profile should have adequate capacity to accommodate the anticipated moderate rise in leverage and remain within the current rating category due to Cadbury's ability to produce strong free cash flow."