Cadbury to demerge sweets and drinks businesses : US Business

LONDON (Reuters) - Britain's Cadbury Schweppes Plc on Thursday said it was planning to split its global confectionery division and its American soft drinks into two separate businesses to help unlock value for shareholders.

The core confectionery side will contain Dairy Milk chocolate and Trident chewing gum, while the soft drinks side would own the Dr Pepper and Snapple brands. Further details on the split will come with the group's trading update on June 19.

Cadbury said following its annual results on February 20 it met with major shareowners holding around 40 percent of its shares, and they were positive about the group's plans for enhanced growth and returns, and plans for separation.

The move comes after Cadbury, the world's largest confectionery group, revealed on Tuesday that U.S. activist investor Nelson Peltz had taken a 2.98 percent stake and analysts said Peltz would pressure Cadbury to split into two.

"Separating these two great businesses will enable two outstanding management teams to focus on generating further revenue growth, increasing margin and enhancing returns for their respective shareowners," said Chief Executive Todd Stitzer in a statement.

Cadbury shares ended on Wednesday at 602 pence valuing the group at 12.6 billion pounds ($24.2 billion), but analysts said if the group was split into two focused groups its combined value would increase significantly.

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