To concentrate on its core business of confectioneries Cadbury Schweppes the UK major in an ambitious restructuring drive is spinning off its American beverages business into a separate entity.

On June 19 2007 Cadbury Schweppes the world's largest confectionery company and the makers of popular Dairy Milk chocolates in a significant yet surprising development announced its decision to separate (read: sell) its American confectionery and beverage businesses to concentrate more on its confectionery business. The move assumes significance as earlier in March 2007 the confectionery major had stated that it would either sell or demerge its Americas Beverages which owns brands such as Dr Pepper 7Up Sunkist Snapple and Hawaiian Punch.

However executives at the London-headquartered firm stressed that it was not a surprise move as the confectionery giant—as stated by Ken Hanna Cadbury Schweppes' CFO— had "been working on the possible separation of beverages for at least a couple of years". Such explanations came in the wake of speculations in the media by some investors that the British giant might itself be up for sale. Some investors even speculated that Cadbury's decision might have been influenced by the US activist investor Nelson Peltz who recently acquired close to 3% stake in the British major. The Transport and General Workers' Union (T&G) which has some 2,000 of Cadbury's 3,500 UK workforce as its members has expressed concern about Peltz's intentions.

"Cadbury is an iconic British brand and a very successful company which does not need the attention of Peltz" said Brian Revell T&G National Organizer for food and agriculture. He termed Peltz's intervention in Heinz as "a ruthless pursuit of profit for shareholders". He added "Cadbury with its Quaker background has been an enormous success for all its stakeholders and shareholders as well as its workforce. We want to preserve that success and independence." A section of analysts too hinted that the corporate raider-turned-activist-investor could possibly be planning a somewhat similar action at Cadbury. "He has considerable knowledge in the North American beverage market and clearly sees value in the company," David Lang an Analyst with Investec told BBC in an interview.

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