The Cott Corporation, the world’s largest retailer brand soft-drink provider, announced recently that it is considering merging with an as yet unnamed suitor.
According to a story in the Toronto Star, the company has been considering merging with Cadbury Schweppes PLC in order to create a stronger rival to Coca-Cola and Pepsi.
The announcement by Cott comes after Cadbury Schweppes announced its plans to separate its confectionary and beverage business this summer making the merger all the more attractive to Cott. According to the same press report, Cadbury’s drinks business is expected to be valued at as much as $15.8 billion.
In a statement released by Cott, the company acknowledges the timing is connected to Cadbury Schweppes’ planned separation.
“Following the recent announcement by Cadbury Schweppes PLC regarding the separation of its confectionary and Americas Beverages business, Cott has responded to interested parties that have approached the company, and is exploring the potential benefits of participating in possible industry consolidation.”
The statement goes on to say, “While the Board of Directors of Cott is supportive of these exploratory discussions, there has been no decision regarding a change in strategy.”
Cadbury Schweppes Americas Beverages owns the brands Dr. Pepper, 7 Up, Sunkist, A&W, Snapple, Mott’s, Hawaiian Punch, and Clamato.
In a press release to announce the separation, Cadbury Schweppes Chairman Sir John Sunderland said, “This decision is of great significance for the Board and the Company. It has been facilitated by acquisitions and disposals over the last decade designed to create a strong and potentially independent Americas Beverages business. In the same time, we have built the world's largest confectionery business. We believe now is the moment to separate and give both management teams the focused opportunity to extract the full potential inherent in these excellent businesses."
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