(RTTNews) - Friday, Cadbury Plc (CBY: News ,CBRY.L: News ) announced that it has completed the sale of the Schweppes Beverages business in Australia to Sumida-ku, Tokyo-based Asahi Breweries, Ltd. (ASBRF.PK: News , ASBRY.PK) for about GBP 550 million in cash.

Net proceeds in 2009 after costs and other charges are expected to be around GBP 475 million and will be used to reduce Cadbury's net debt and towards repaying the EUR 600 million bond that matures in June 2009. Additional cash costs of about GBP 20 million are expected to be incurred as a result of separation activities in 2010 and 2011.

The Schweppes Australia sale, which marks Cadbury's exit from the beverages market, was treated as a discontinued business for fiscal 2008. Regarding the transaction, Cadbury CEO Todd Stitzer said, "The successful sale of Schweppes Australia has completed Cadbury's transformation into a pure-play total confectionery business."

For Asahi Breweries, the deal is seen as enabling the company to grow outside of its home market in Japan, where a slowdown in consumer spending combined with an aging population has hurt its sales.

Schweppes Australia, which employs around 1,500 people, is the second largest non-alcoholic ready to drink beverages business in Australia. Its portfolio consists of both owned and franchised brands, including Schweppes and Pepsi.

For the year ended December 31, 2007, after adjusting for terminated contracts, Schweppes Australia reported revenues of GBP 313 million, earnings before interest, taxation, depreciation and amortization of GBP 33 million and gross assets of GBP 279 million.
Following confirmation from The Coca-Cola company (KO) of its intention to not pursue its right of negotiation regarding the potential acquisition of the Schweppes Australia business; Cadbury on March 12, announced that it has agreed to sell the business to Asahi.

In 1999 Cadbury had granted Coca-Cola the right to negotiate the Schweppes Australia acquisition till March 2009.

It was in December 2008 that the confectionery giant announced entering into a conditional agreement with Asahi to sell the business. After activist investor Nelson Peltz took a stake in Cadbury and pressed for changes including the disposal or demerger of its beverages business, the company commenced a strategic review of the Australian beverages division in July 2008.

Cadbury's divestment of its beverage business began in 2005 when the company announced the sale of its European beverages business to a private-equity consortium. Further in May 2008, Cadbury demerged the largely U.S.-based business Dr Pepper Snapple Group, Inc. (DPS).

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