Britain's Cadbury Schweppes has announced that it is to buy out its partner in the German joint venture Appolinaris & Schweppes, giving it 100 per cent control of Germany's best known mineral water.
Appolinaris & Schweppes was formed in 1991 by the UK group and Germany's Brau und Brunnen, then sole owner of the Appolinaris brand. Cadbury said it had now agreed to buy Brau und Brunnen's 72 per cent stake in the venture for €151 million, allowing it to take sole control not only of Appolinaris but also of the Heppinger (mineral water) and Big Apple (water and apple juice mix) brands.
Apollinaris, known as the Queen of Table Waters since 1853, is the best known mineral water brand in Germany. Both the Apollinaris and Schweppes brands are available throughout the country, and Cadbury said that full ownership of the company would allow it to take better advantage of this nationwide distribution to grow both the existing brand range and introduce some of its other beverage brands into the German market place.
Cadbury said that Germany was by far the largest soft drinks market in Europe, citing figures from Canadean which set total volumes at 21 billion litres and retail sales at €37 billion in 2001. The German market for all soft drinks has grown steadily in recent years, the company said, with waters the star performers within that group.
"In recent years, the performance of our European beverage business has benefited significantly from broadening our brand portfolio and strengthening our route to market," said John Sunderland, CEO of Cadbury Schweppes. "Full ownership of Apollinaris & Schweppes is an important step in enabling Cadbury Schweppes to develop a stronger presence in Europe's largest soft drinks market."
Sunderland said that the acquisition would be funded entirely from the group's existing resources, and that the UK group would assume €14 million of net debt as a result of the transaction. The sale is still subject to approval by the German competition authorities and Brau und Brunnen shareholder, but Cadbury expects no problems and the sale should be completed by December.