NEW YORK Cadbury Schweppes announced plans today to spin off its U.S. drinks unit, listing the Americas Beverages division on the New York Stock Exchange, according to Bloomberg.
The decision was made after the search for a buyer was derailed by record subprime mortgage defaults in the United States. The unit accounted for 35 percent of Cadbury’s $15.1 billion in 2006 sales and controlled 15 percent of the U.S. soda market with such brands as Dr Pepper, Seven-Up and Snapple. Cadbury said it would cut 470 jobs at Americas Beverages.
The plan allows for Cadbury, the world’s largest candy maker, to focus on its forte—confectionary. Chief Executive Officer Todd Stitzer said on a conference call that confectionary sales rose 10 percent in Europe and U.S. sales increase 14 percent, boosted by sales of Stride gum.
According to a note from Bear Stearns Co., the spinoff is disappointing because investors expected the London-based company to make much as $15 billion from the sale before the subprime crisis.