Cadbury sets date for drinks demerger

By Charlotte Eyre

- Last updated on GMT

Related tags: Cadbury, Goldman sachs

Cadbury today set a timetable for the planned demerger of its
beverage arm, with the process expected to be completed by 7 May
this year.

The confectionery giant is also bringing forward its annual general meeting to 11 April so that shareholders can approve the move, the company said in a statement. The company had faced speculation earlier this week that it would be forced to put the demerger on hold, as analysts at Bear Stearns warned investors of weakening debt markets. Cadbury yesterday refused to comment on the rumours, stating that it did not comment on reports such as these. However, Cadbury said today that a number of new credit agreements had been made to finance the move, "many of which are expected to be satisfied by the shareowner meeting on 11 April". ​The firm stated that prior to the demerger it expects to have net debt of £3.2bn, and the Dr Pepper Snapple Group, the new beverage business, will be financed with new debt. Cadbury has signed credit agreements with five banks - JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley and UBS. The new Cadbury confectionery business will then have net debt of £1.65bn after the payment of the group's final dividend, the company said. Existing shareholders will have stock in both companies. The announcement is likely to go some way in reassuring investors, as there has been much speculation over the fate of Cadbury's beverage arm since the company aborted plans to sell the business. The company then decided on a demerger last June, after the credit crunch ruled out a number of possible private equity bids. However, Cadbury today said that the dates given are "indicative only and may be subject to change".

Related topics: Manufacturers, Mondeléz International

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