Cadbury Schweppes a step closer to selling drinks arm

Confectionery and drinks giant Cadbury Schweppes today looked a step closer to selling its drinks arm as a Canadian firm emerged as a potential bidder for the business.

Cott Corporation, one of the world’s largest providers of own-brand drinks to retailers, admitted it was “exploring the potential benefits of participating in possible industry consolidation” after mounting speculation suggested it was plotting a bid for Cadbury’s drinks division.

Cadbury Schweppes last month unveiled plans to split itself into two, separating its American beverages business from the rest of the company, which is best known for Dairy Milk chocolate and Bassett’s sweets.

Rumours of private equity interest in the business have been mounting, but Cott emerged as a possible front runner after its shares stopped trading in Toronto “pending news”, which was said to signal Cott was soon to announce a plan to buy Cadbury’s drinks unit.

Cott said in a statement it had “responded to interested parties that have approached it after Cadbury Schweppes announced it would split its confectionery and Americas beverage business”.

If Cott was to buy the Cadbury brands, which include Dr Pepper, 7 Up and Snapple, it would reportedly become the world’s third largest soft drinks company.

Cott already has a presence in the UK, with factories in West Yorkshire, Derbyshire and Lancashire.