Cadbury Schweppes announces that it has agreed to acquire Intergum, a Turkish gum business, from the Amram family for a consideration of US$450 million (approximately £225 million) in cash and assumed debt. The acquisition, which is subject to regulatory approval by the Turkish Competition Board, is expected to complete in the third quarter of 2007.
The acquisition of Intergum will strengthen our participation in the fast-growing Turkish confectionery market, and will enhance our presence in the attractive Turkish gum market, which grew 17% last year. We also expect to benefit from Intergum's strong capabilities, particularly in the manufacturing of value-added gum products, such as gum base and centre-filled gum, at low cost.
In 2006, Intergum had a 46% share of the Turkish gum market (Source: AC Nielsen), and had revenue of US$109 million, of which approximately 25% was from exports. Further information on Intergum and the Turkish gum market is given in the Notes at the end of this announcement.
Todd Stitzer, Chief Executive Officer, said: "The purchase of Intergum is aligned with our strategy of pursuing bolt-on acquisitions to further strengthen our confectionery platform. We already have the largest emerging markets business of any confectionery company, and acquiring Intergum adds to our presence in these high-growth markets. Intergum is also highly complementary to our current operations in Turkey, where we have a leading position in the candy market. We look forward to Intergum joining Cadbury Schweppes."
About Cadbury Schweppes
Cadbury Schweppes is the world's largest confectionery company and has strong regional beverages businesses in North America and Australia. On 15 March 2007, Cadbury Schweppes announced that it intends to separate its confectionery and Americas Beverages businesses. With origins stretching back over 200 years, today Cadbury Schweppes' products - which include brands such as Cadbury, Schweppes, Halls, Trident, Dr Pepper, Snapple, Trebor, Dentyne, Bubblicious and Bassett - are enjoyed in almost every country around the world. The Group employs over 70,000 people.
The Turkish Gum Market
The Turkish gum market had a value at retail in 2006 of US$232 million, and grew by 17%. The market has grown at 17% CAGR between 2003 and 2006. Sugar-free gum grew at 33% CAGR over the same period, and had a 47% share of the total gum market in 2006. Sugarless gum has a 30% share of the market, and grew by 6% per annum from 2003 to 2006, and bubble gum a 21% share, with 9% per annum growth between 2003 and 2006. (Source: Nielsen).
Further Information on Intergum
In the Turkish market, Intergum has two principal chewing gum brands, "First" in sugar-free gum and "Falim" in sugarless gum, and also has a small bubble gum business. Intergum also exports to the Middle East, the Balkans, and Russia and the CIS under the chewing gum brands "O2", "Love is" and "Taxi", and with centre-filled bubble-gum under the "Freshbol" brand. Intergum has one manufacturing plant in Istanbul and approximately 1,200 employees.
Forward Looking Statements
Except for historical information and discussions contained herein, statements contained in these materials may constitute "forward looking statements" within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. Forward looking statements are generally identifiable by the use of the words "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal" or "target" or the negative of these words or other variations on these words or comparable terminology. Forward looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward looking statements. In evaluating forward looking statements, you should consider various factors including the risk factors outlined in our Form 20-F filed with the US Securities and Exchange Commission. These materials should be viewed in conjunction with our periodic interim and annual reports, registration statements and other filings filed with or furnished to the Securities and Exchange Commission, copies of which are available from Cadbury Schweppes plc, 25 Berkeley Square, London W1J 6HB, UK and from the Securities and Exchange Commission's website at www.sec.gov. Cadbury Schweppes plc does not undertake publicly to update or revise any forward looking statement that may be made in these materials, whether as a result of new information, future events or otherwise.