Monday, May 24, 1999 Published at 20:40 GMT 21:40 UK
Business: The Company File
Cadbury-Schweppes waters down Coca-Cola deal
Cadbury Schweppes faced opposition to the deal in several countries
Cadbury Schweppes is to keep control of its soft drinks brands in most of Europe instead of selling them to Coca-Cola, following concerns about delays in winning approval from European regulators.
Under the original £1.14bn deal, announced in December last year, Coca-Cola was to buy all of Cadbury's drink brands except those in the US, France and South Africa.
The countries where Cadbury Schweppes will now retain control include Belgium, Norway, Spain, Switzerland, The Netherlands and Germany which was reportedly ready to reject the plan later this week.
The companies still hope to receive approval for the sale in the UK and Ireland and 98 other countries worldwide.
Cadbury chief executive John Sunderland said both companies had researched potential regulatory hurdles in 20 countries before announcing their plans in December.
However, they now faced lengthy and complex regulatory resistance against the deal in some European countries which would "probably result in unacceptable delay".
The delays have also forced the companies to revise their aim of having the entire sale completed by the middle of this year.
Instead, they now expect the deal to be finalised by July only in about half the countries which have already given their approval or where regulatory clearance is not required.
'End to uncertainty'
Mr Sunderland also said the revised deal, now worth about £683m, would mean that Cadbury's plan to sell its bottling and related beverages assets for about £500m would not go ahead.
"We will still receive significant cash sum whilst retaining our strong European soft drinks business," he said.
"What we are doing removes uncertainty for our employees, for our bottlers and our shareowners and ensures a swifter conclusion to the transaction."
The original deal was to merge the drinks operations of both companies in more than 120 countries.
Coca-Cola would buy Cadbury brands including Dr Pepper, Seven-Up, Canada Dry and Schweppes under the plan.
Excluded from the deal was Cadbury's US business, which has a 15% stake in the local market.
The European Union's competition commission warned Coca-Cola last month that it faced a heavy fine unless it submitted its proposed deal with Cadbury for EU approval.
It accused Coca-Cola of trying to bypass the European Commission by instead notifying regulators in countries affected by the deal.
Australia, Belgium and Mexico have already rejected or sought amendments to the deal since it was announced. No announcement has yet been made by Britain.
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