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Schweppes buys Dr Pepper
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September 1, 1999: 8:26 a.m. ET
Soft drink maker's U.S. bottler to merge with Dr Pepper Bottling for $691M
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NEW YORK (CNNfn) - Cadbury Schweppes PLC and Carlyle Group, parents of American Bottling Co., have agreed to buy the privately held Dr Pepper Bottling Co. of Texas for a total of $691 million.
The deal, confirmed Wednesday, will form the largest independent soft drinks bottler in the United States.
In London, Cadbury Schweppes shares rose 12-1/2 pence, or more than 3 percent, to 405-1/2 after news of the Dr Pepper deal. The company's shares (CSG) closed down 1/4 at 25-3/8 in New York Tuesday.
The new entity will combine the country's leading bottlers of brands owned by Dr Pepper/Seven Up Inc., the U.S. beverage unit of Cadbury, and create a stronger competitor against Coca-Cola Co. (KO) and PepsiCo Inc. (PEP).
Under terms of the transaction, Cadbury Schweppes and Carlyle Group will pay $283 million cash and assume $408 million in debt. Cadbury will hold a 40 percent stake in the combined enterprise; Carlyle 53 percent; and Dr Pepper Bottling's CEO Jim Turner and management will own the remainder.
John Brock, managing director of Cadbury Schweppes Beverages Stream, will become chairman of the new entity and Turner will serve as its CEO and a director.
"This is another significant step in consolidating and strengthening the independent bottling system in the U.S. It will further enhance the strategic alignment between Dr Pepper/Seven Up and its key bottlers," Cadbury Schweppes CEO John Sunderland said.
In addition to Dr Pepper, 7 UP, A&W Root Beer, Canada Dry and other brand name soft drinks, the new enterprise will distribute Snapple, Mistic, Evian, Royal Crown Cola, Diet Rite and Big Red.
Darien, Ill.-based American Bottling was formed 18 months ago after the merger of two independent soft-drink bottlers. Carlyle Group, a Washington investment firm, owns a 60 percent stake in the company. Cadbury owns the remainder and has management control.
In July, Cadbury completed the sale of most of its soft drink businesses outside the United States and continental Europe to Atlanta-based Coca Cola Co. in a deal valued at approximately $1.1 billion. 
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Cadbury Schweppes
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