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Cadbury chews up $4.2bn gum maker
LONDON, England (CNN) -- Britain's Cadbury Schweppes has agreed to buy Pfizer's Adams confectionery business for £2.7 billion ($4.2 billion) in cash. The deal makes Cadbury, which owns the Dairy Milk chocolate, Trebor mints and Dandy gum brands, the second-biggest chewing gum maker in the world with a market share of 26 percent. Adams makes Trident, Dentyne and Bubblicious bubble gum. Cadbury (CBRY) beat tough competition from Kraft Food (KFT) of the U.S., Switzerland's Nestle, WM. Wrigley Jr. -- the biggest chewing gum maker -- and other bidders. London-based Cadbury has been on the prowl for growth outside its dominant confectionery markets in Britain, Ireland and Australia. Adams, which also makes Halls cough drops, Certs mints and Clorets breath fresheners, has a big presence in the United States and Latin America and would position Cadbury as the world's biggest confectionery group. "Adams gives us confectionery market leadership and a unique portfolio with an offering in every confectionery category," Cadbury Chief Executive John Sunderland said in a statement on Tuesday. "It brings powerful brands, access to new geographies and significant scale in the fastest growing confectionery sectors." Pfizer (PFE), the world's biggest drugs group, put Adams up for sale in June after a two-year bar on selling it expired following Pfizer's acquisition of Warner Lambert. Pfizer sold the business to focus on developing new medicines and acquisition of rival Pharmacia Corp. Cadbury bought French gum brand Hollywood for £170 million from Kraft in 2001 and swallowed Denmark's Dandy for £350 million earlier this year pushing it to number three in the world. The UK group sees gum as faster-growing and more international than chocolate, which tends to reflect national taste and be relatively static in mature western markets. In addition, Cadbury sees gum as having potential health benefits and tooth-whitening properties, Reuters said. With 75 percent of Cadbury's profits coming from its Dr Pepper/7Up U.S. soft drinks business and its British and Irish confectionery division, it needed to expand to be a global player to compete with the likes of Nestle, U.S.-based privately owned Mars, and Kraft. Cadbury's stock, which has fallen about 7 percent this year, rose 1.9 percent to 416 pence in early London trading.
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