Cadbury Schweppes Eyes Dr Pepper/Seven-Up for £1.5 Billion Takeover

Cadbury Schweppes, a British confectionery-to-soft-drinks giant, has its sights set on acquiring control of the US-based Dr Pepper/Seven-Up group, in which it already holds a 25% stake. The move, which would dramatically strengthen Cadbury's position as the world's third-largest fizzy drinks company, could cost up to £1.5 billion. The company has confirmed that it has held exploratory discussions regarding a possible business combination, but no definitive proposals or plans have been developed.

Key Takeaways:

Cadbury Schweppes has a 25% stake in Dr Pepper/Seven-Up and has expressed interest in acquiring control of the group.
The takeover could cost up to £1.5 billion and would strengthen Cadbury's position as the world's third-largest fizzy drinks company.
The company currently supplies soft drinks concentrate for Cadbury products in the US market and acts as the sales agent for some of its drink products.
Analysts believe that a merger with Dr Pepper would see Cadbury's 3.4% market share of the US fizzy drinks market expanded to between 14 and 15%, providing a significant boost to the company's earnings.
Cadbury has considered increasing its share stake in Dr Pepper or pushing for representation on the board.
Analysts point out that a director's seat on the board would enable Cadbury to include earnings from its Dr Pepper investment on the group's main profit and loss account.

Statistics:

Cadbury Schweppes' 25% stake in Dr Pepper/Seven-Up.
£1.5 billion estimated cost of the takeover.
3.4% market share of the US fizzy drinks market currently held by Cadbury.
14-15% estimated market share that Cadbury would gain if it merges with Dr Pepper.
£155 million bought by Cadbury for a 20% stake in Dr Pepper last year.
30% share of the US non-cola drinks market held by Dr Pepper.

Sources:

[SEC Filing] Cadbury Schweppes' Filing to the Securities Exchange Commission.
[Analyst Quotes] Analysts' comments published in the article.