Cadbury and Schweppes are two prominent and long-established companies. Cadbury was founded in 1824 and is the world’s largest confectionary company. The bulk of Cadbury’s sales are generated in Europe, with a substantially smaller presence in the Americas. Schweppes was founded in 1783, when its founder Jacob Schweppes invented a system to carbonate mineral water.
Its brands include 7-Up, Dr Pepper, Sunkist, Snapple, Schweppes, and Mott’s. Cadbury and Schweppes merged in 1969. In 2008, the combined firm posted approximately $32 billion in revenue and an $8.8 billion loss. The firm employed 160,000 people at this time. In what is termed a “demerger,” the firm in 2008 spun off its North American beverage unit (Dr Pepper Snapple Group) and changed its name from Cadbury Schweppes to just Cadbury.
Working in teams, prepare a brief PowerPoint presentation to address the following questions. You will need to consult the company’s now separate Web sites http://www.drpeppersnap plegroup.com/ and http://www.cadbury.com, as well as news articles published about this event. Lexis Nexis is a good resource for news on topics such as this.
1. Why did Cadbury decide to divest itself of the beverage business?
2. What does it mean that Cadbury listed the separation as a demerger?
3. What factors hindered the success of a combined Cadbury Schweppes?
4. Do you feel that both the beverage and confectionary businesses are better or worse off being separated?