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Cadbury Schweppes has agreed to sell its European beverages unit, including the Orangina and Schweppes soft drinks, to two private equity firms for $2.2 billion. The move allows Cadbury to concentrate on its confectionary business in Europe and its American soft drink brands, which include 7Up and Dr Pepper, the company said.
Lion Capital and the Blackstone Group will take control of Orangina. The two groups will also buy the Schweppes line in Europe, according to a report in The New York Times . The Schweppes brand of soft drinks will continue to be produced and sold by Cadbury in the United States, Australia, Mexico and Canada.
Cadbury has struggled for growth in its drinks business in Europe, even after committing cash to buy brands. For the fiscal year ended in January, the European drinks group had $1.2 billion in sales, down 5.6 percent from the year before.
The two private equity groups beat out rivals by offering slightly more than market expectations, and having the financing in place to do the deal quickly, according to the report. The deal needs the approval of European regulators and employee representatives in France, Germany and Belgium. Lion expects the transaction to close early next year.