Cadbury Schweppes to Buy Snapple

N E W  Y O R K, Sept. 18 -- In a deal that could shake up the drink market, Britain’s Cadbury SchweppesPlc said it would buy the Snapple Beverage Group fromTriarc Companies for $910 million in cash, plus the assumption ofdebt and other provisions.

The overall value of the deal is estimated at $1.45 billion, and includes Snapple and all of its brands, including Mistic, Stewart’s and Royal Crown Cola. “The acquisition of the Snapple Beverage Group will significantly expand Cadbury Schweppes’ position in the U.S. soft drinks market,” said Cadbury Schweppes CEO John Sunderland. “It will substantially increase our exposure to the profitable and high growth New Age beverage sector and complements our leading position in flavored carbonated soft drinks.”

The acquisition includes the assumptionof $420 million in financial liabilities, and a $120 millionpayment for employee options.

New Age Drinks

Cadbury Schweppes said in a statement that Snapple is the leading brand in the “profitable and high-growth premium ready-to-drink tea and juice sector of the New Age beverage market.”

Sunderland said the price is about 12 times Snapple’s 2000 EBITDA (earnings before interest, tax, depreciation and amortization). Snapple had revenues of $772 million in 1999, with an EBITDA of $111 million.

Popular Reads

Iran live updates: Trump says agreement with Iran could be signed this weekend

• 3 hours ago

Karmelo Anthony sentenced to 35 years for murder in Texas track meet stabbing

• Jun 10, 11:37 AM

Israel conducts strikes in Iran, IDF says

• Jun 7, 9:43 PM

The deal is forecast to immediately add to Cadbury Schweppes’ earningsand cover its weighted average cost of capital within threeyears, the company said.

Cadbury Schweppes said it identified $500 million in “hard costsynergies,” including $10 million to $15 million in the firstyear of combined operation and $50 million by the third year.

Cadbury Schweppes will also pay $200 million for the benefitof a U.S. tax election, which it says would eventually allow thebenefit of $250 million, by writing off goodwill costs of theacquisition over 15 years.

A Matter of Market Share

“We are very excited about the combination of our business with Cadbury Schweppes,” said Snapple chief Michael Weinstein. “The transaction offers a great opportunity to enhance our growth prospects.”