Cadbury Set To Take Ownership of Bottling Unit

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Cadbury Set To Take Ownership of Bottling Unit

Confectioner and beverage maker Cadbury Schweppes PLC has agreed to pay $353 million to gain control of its Dr Pepper/Seven Up U.S. bottling unit from its joint-venture partner, the Carlyle Group, The Houston Chronicle reported.

The London-based company announced it will buy Carlyle's 53 percent stake and the remaining shares to take full ownership. Cadbury also agreed to buy All American Bottling Co., the third-largest independent bottler in the U.S., for about $65 million.

"The acquisition is strategically consistent, financially attractive and value enhancing," said Cadbury Chief Executive Officer Todd Stitzer. "It gives us greater control over the distribution of our brands; improved operating efficiencies and customer service; and greater access to faster growing water and energy drinks," he added.

The Dr Pepper/Seven Up unit is the largest independent bottler in the United States and Cadbury said it had revenues of $2 billion in 2005.

The transaction is subject to regulatory approval in the United States and is expected to close in early May. Cadbury said the deal is expected to enhance underlying earnings in 2006. Cost and revenue synergies are expected to reach $120 million by 2010, it added. The company expects restructuring costs of around $35 million in 2006 and 2007.