Cadbury Swot Analysis

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For Immediate Release

17 December 2002

CADBURY SCHWEPPES TO ACQUIRE ADAMS FROM PFIZER Cadbury Schweppes becomes joint No 1 in global confectionery, leader in sugar and functional confectionery and No 2 in chewing gum Summary • Cadbury Schweppes plc has agreed to buy Adams from Pfizer Inc for a total gross cash consideration of $4.2 billion (£2.7 billion), representing $3.75 billion (£2.4 billion) net for the base Adams business plus $450 million (£288 million) for tax benefits. This base valuation represents 2.0 times 2001 sales and 12.8 times 2001 underlying EBITDA. The deal will be debt financed and is expected to earn a positive return on capital in 2006 and enhance underlying earnings in 2004. Globally, Cadbury Schweppes will become joint leader in confectionery and No 2 in chewing gum with a 26% market share. overall

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It will also lead the higher margin functional confectionery sector where appealing taste, combined with health benefits, is driving growth at double the overall market rate. Four “power” brands represent over 70% of Adams’ sales: Halls medicated confectionery, Trident sugarfree gum, Dentyne Ice chewing gum and the Bubbas bubblegum range. Cadbury Schweppes gains particularly in Latin America. scale access to major new markets,

Value creation will be driven by performance improvements in the Adams business as well as cost and revenue synergies which are expected to reach $185 million across Cadbury Schweppes in 2006.

John Sunderland, CEO of Cadbury Schweppes, said, “Adams gives us confectionery market leadership and a unique portfolio with an offering in every confectionery category. It brings powerful brands, access to new geographies and significant scale in the fastest growing confectionery sectors. Cost and revenue synergies, and the opportunity to drive the business within a global confectionery group, will create significant value for our shareowners.” Transaction details follow Page 1 of 1

PROPOSED ACQUISITION OF ADAMS Introduction The Board of Cadbury Schweppes plc today announced that Cadbury Schweppes has reached an agreement to acquire 100% of the businesses and assets of the Adams division from Pfizer Inc. for a cash consideration of $4.2 billion which includes a $450 million value for expected tax benefits. The net consideration of $3.75 billion represents a multiple of 2.0 times 2001 sales and 12.8 times 2001 underlying EBITDA. The acquisition comprises the principal brands, including Halls, Trident, Dentyne/Dentyne Ice, the “Bubbas”, Clorets, Chiclets and Certs, together with other functional confectionery products, manufacturing facilities and international sales, distribution and support networks. The acquisition will be debt financed. Cadbury Schweppes has entered into new facilities totalling $6.1 billion, whi ch includes the replacement of Cadbury Schweppes’ existing standby facilities and debts as they mature. The acquisition is conditional on Cadbury Schweppes’ shareholder and regulatory approvals and is expected to complete by Easter 2003. Information on Adams Adams is a branded global confectionery manufacturer with 2001 net sales of $1.9 billion across 70 countries. In 2001, Adams had a 3.3% share of the total global retail confectionery market and within this 25.5% of the retail market for functional confectionery. Within the sugar and gum sectors of the market, Adams’ products are particularly focused on functional products. Its market position is supported by strong R&D and technical capabilities. Adams’ brands include four “power” brands Halls, Trident, Dentyne/Dentyne Ice, and the “Bubbas” range – as well as a range of strong established regional and local brands - Clorets, Chiclets and Certs. Over 70% of Adams’ sales are accounted for by the four power brands. In total Adams has 22 factories in 19 countries, 11,586 permanent employees and a further 2,844 temporary employees spread across 40 countries. Adams has one central and 10...
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