Tuesday, September 19, 2000

Cadbury Schweppes snaps up Snapple

The Associated Press

        NEW YORK — Cadbury Schweppes Plc, the British company famous for its bubbly tonic water, is jumping headlong into the market for New Age beverages with its acquisition of the category-leading Snapple line of teas and juice drinks.

        The beverage and candy maker is also adding Royal Crown, Diet Rite and Nehi to its roster of carbonated soft drinks led by 7Up and Dr Pepper under the deal announced Monday with Triarc Cos. Inc., based in New York.

        That will boost Cadbury's share of the $58 billion U.S. market for carbonated beverages by about 1.2 share points to about 16 percent, but still leaves it a distant third behind Coca-Cola Co. and Pepsi-Cola Co.

        “This makes them the pre-eminent marketer of premium New Age beverages,” said Gary Hemphill, who follows industry trends for the research firm Beverage Marketing Corp. He said sales of such beverages are growing faster and are more profitable than those of carbonated soft drinks.

        Cadbury is paying $910 million in cash for the Snapple Beverage Group to Triarc, which had announced in June that it planned to sell a 20 percent stake in its soft-drink business in an initial public offering this year.

        Nelson Peltz, chief executive at Triarc, said Cadbury subsequently made an offer for the beverage group that Triarc management felt was better for its shareholders than taking the beverage group public.

        Investors seemed to agree, sending Triarc shares up 3 percent, or 75 cents, to $25 on the New York Stock Exchange, where U.S. shares of Cadbury were down 12.5 cents to $22.38.


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- Cadbury Schweppes snaps up Snapple