Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, September 10, 1993 TAG: 9309100143
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: LONDON LENGTH: Short
The deal would nearly double Cadbury's share of the $47.4 billion U.S. soft-drinks industry and follows its recent courtship of Dr Pepper/Seven-Up Cos. Inc.
Analysts think Cadbury, the world's No. 3 soft-drink maker behind Coca-Cola and Pepsi, is planning a complete takeover of Dallas-based Dr Pepper-Seven-Up, which is No. 3 in the United States. Cadbury runs a distant fourth in the U.S. market, the world's largest.
"A&W is one step, but the real play is in Dallas," said Tom Pirko, president of the beverage industry consultants Bevmark Inc. in Los Angeles.
Through its proposed buyout of A&W, Cadbury stands to increase its share of the U.S. market to 5.6 percent from 3.4 percent. Dr Pepper-Seven-Up has 10.6 percent of the market. A Cadbury buyout of Dr Pepper-Seven-Up, plus A&W, could create a company controlling 16.2 percent of the business.
At that size, Cadbury would be better able to compete with Coke and Pepsi, which together control more than 70 percent. Cadbury, which controls Crush, Canada Dry and Sunkist, increased its stake in Dr Pepper-Seven-Up to 25.9 percent last month.
Cadbury said it would pay $24.50 per share for A&W, a 21 percent premium over Wednesday's closing price of $20.25 on the NASDAQ. A&W is recommending that shareholders accept the offer.
by CNB