COLA KING TO BUY GLOBAL RIGHTS TO DR. PEPPER, CANADA DRY.
Coca-Cola Co. agreed to buy most of rival Cadbury Schweppes Plc.'s beverage brands outside the U.S. for $1.85 billion in cash and debt, adding Cadbury's Canada Dry, Dr. Pepper and Crush brands to its stock in more than 120 countries.
``The test will be whether Coke can extract more from those brands than Cadbury was able to,'' said Michael Schroeder, chief investment officer of Wasmer, Schroeder & Co. in Naples, Fla., which owns Coke stock. London-based Cadbury is all but withdrawing from international beverage markets as it concentrates on its candy and U.S. soda businesses.
Coke's move is the latest by Chief Executive Douglas Ivester to cement its position over PepsiCo Inc. as the leading beverage company in most nations.
Brad Shaw, a spokesman for rival PepsiCo Inc., said the No. 2 soft-drink maker will ``take a close look at every aspect of this deal,'' but declined to be more specific.
PepsiCo owns international rights to 7UP, which is a Cadbury soft drink in the U.S., and its U.S. bottlers are large distributors of Cadbury sodas.
The transaction, which requires regulatory approval, is likely to be concluded in mid-1999 and excludes South Africa and France. France is omitted because Coke wants to appease regulators there who rejected its $902 million offer for Orangina because of competitive concerns.
Atlanta-based Coca-Cola's market share of the world's soft-drink industry will increase to 52 percent from 50 percent as a result of the acquisition, said Salomon Smith Barney analyst Jennifer Solomon, who upgraded Coke shares to ``buy'' from ``neutral'' after the announcement.
PHOTO (Color) Coca-Cola is buying the right to sell Cadbury Schweppes brand beverages like these outside the U.S., France and South Africa.
John Lazar/Daily News
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Dec 12, 1998|
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