Cadbury, Coca Cola to Drop EU Countries from Soft Drink Deal

According to a report from Agence France Press, Cadbury Schweppes PLC is being forced to renegotiate the sale of its non-U.S. soft drink brands to Coca Cola Co after meeting what finance director David Kappler described as a regulatory " brick wall" in several European countries. With the exception of the UK, Ireland and Greece the new Coca Cola deal excludes all European Union countries as well as Norway and Switzerland.

As a result Cadbury Schweppes will retain the businesses not being sold. In addition the group has been forced to retain bottling assets in Europe that were originally earmarked for disposal in the deal. Nevertheless, the revised agreement still covers over 100 countries and completion of the transaction in a substantial majority of them is expected in July.

Cadbury Schweppes and Coca-Cola carried out extensive research into the issue of regulatory clearance before the original transaction was announced and it was recognized that in the 20 or so countries where this was required it was likely to be a lengthy and complex process.

"Our original agreement with Coca-Cola was a bold strategic move, giving us a premium price for our beverages businesses and broadening our options for the future global development of our group," said John Sunderland, Cadbury's CEO in a statement. "The adjustments we have made to the transaction in no way diminish the validity of this strategy."