Cadbury puts American beverages sale on ice

is considering the option of a demerger instead of a sale of its
American beverages arm, because of leveraged debt market instability.

The company has shelved the sale for the time being, saying that it would
prefer to wait until the market had become less uncertain, for the benefit of

However, Cadbury would not pinpoint exactly when it would switch its strategy
from the estimated £7bn sale to a demerger if the debt market continued to show

In a conference call, Cadbury CFO Ken Hanna said: ‘We haven’t got a crystal
ball on the global debt market but I’d like to stress that we will take the
actions that will maximise shareholder value. We are in a very competitive
process so we’re not going to be drawn on a timetable on this but, as we’ve done
in all previous instances, we’ll make a quick announcement to the market if we
change our mind.’

Hanna confirmed that a sale remained the company’s preferred option: ‘We’ve
still got interested buyers and a sale remains the preferred option but,
obviously, there’s extreme volatility in the debt markets.’

Further reading:

Demerger survival

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