Cadbury Schweppes is close to acquiring the Dr Pepper/Seven Up Bottling Group

Several media sources are reprting that Cadbury Schweppes is close to acquiring the Dr Pepper/Seven Up Bottling Group, the largest independent bottler in the US, from the Carlyle Group, a US private equity group.

The acquisition, expected to be announced shortly, will give Cadbury greater control over the distribution of its US soft drink brands, which include Dr Pepper and Snapple.

Cadbury has a 45 per cent equity stake in the bottling group, with most of the remainder held by Carlyle.

Cadbury and Carlyle bought the privately held group for $283m in cash and $408m in debt in 1999.

Currently, Cadbury is the third-biggest soft drinks manufacturer in the US behind Coca-Cola and Pepsi with a 17% share of the CSD market. This could put the purchase price at $535 million for Carlyle’s equity stake.

The purchase will add to growing signs of restructuring in the US beverage industry, as soft drink companies rethink their relationship with the bottlers that produce and distribute their products.

This deal would give Cadbury greater control over its distribution network as well as the ability to negotiate with key retailers — such as Walmart — directly. In addition, this sets the stage for Cadbury to spin off its US beverage unity.

Stay tuned for more info…