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Cadbury Swot Analysis

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For Immediate Release 17 December 2002 CADBURY SCHWEPPES TO ACQUIRE ADAMS FROM PFIZER Cadbury Schweppes becomes joint No 1 in global confectionery, leader in sugar and functional confectionery and No 2 in chewing gum Summary • Cadbury Schweppes plc has agreed to buy Adams from Pfizer Inc for a total gross cash consideration of $4.2 billion (£2.7 billion), representing $3.75 billion (£2.4 billion) net for the base Adams business plus $450 million (£288 million) for tax benefits. This base valuation represents 2.0 times 2001 sales and 12.8 times 2001 underlying EBITDA. The deal will be debt financed and is expected to earn a positive return on capital in 2006 and enhance underlying earnings in 2004. Globally, Cadbury Schweppes will …show more content…

The three subsectors of sugarised gum, sugarfree gum and bubblegum, grew at average rates of 0.5%, 7% and 1% respectively over the same period. The faster growth of sugarfree gum reflects the grow th in demand for products with a functional benefit. Bubblegum products are mainly aimed at children and are showing faster rates of growth in developing markets where the child population is large and growing. The functional confectionery and g um sectors are highly attractive given: they are highly branded; the products are premium priced with consumers willing to pay for functionality and convenience; and improvements in functionality (based on R&D) are a key driver of demand. Adams’ Key Brands Four “power” brands account for over 70% of Adams’ sales – the Halls brand, the Trident and Dentyne gum brands and the “Bubbas” range of bubblegums. Among these key brands, Adams has the number one sugar confectionery brand in the world, the number one chewing gum brand, the number one sugarfree gum brand and the number one bubblegum brand. • Halls is the number 1 global sugar confectionery brand and has a significant lead over other major sugar brands. It is also the number one medicated confectionery brand with a 22% value share of the world market in 2001. Halls has strong positions in 24 markets around the world. In 2001, it accounted for 27% of Adams’ sales and during 2000 and 2001 showed compound average sales growth of 2.4% at constant exchange rates. The product

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