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Cadbury makes cautious start

Cadbury shares were flat on the stock's first day of trading as a standalone company following the demerger of the drinks division.

Cadbury shares traded at around 630p a share today, giving the chocolate manufacturer a market capitalisation of around J8bn and a safe position in the FTSE 100. Trading screens suggested that the company gained more than 10% today, but this was figure was meaningless given the demerger of the drinks business.

It is still the world's second biggest sweets business after the split, behind Mars, which announced a deal to take over chewing gum maker Wrigley earlier this week.

The US soft drinks arm begins trading on the FTSE 100 under the name Dr Pepper Snapple Group on Wednesday.

Shareholders received 64 Cadbury shares and 12 Dr Pepper Snapple shares for every 100 shares they owned in Cadbury Schweppes.

Cadbury Schweppes decided to demerge last October following pressure from the activist investor Nelson Peltz from March.

It abandoned a sale to private equity last summer in light of the credit market turmoil.

Cadbury's brands include Creme Eggs, Green and Black's chocolate and Trident, Dentyne, Hollywood and Bubbaloo chewing gum. Drinks produced by Dr Pepper Snapple include Dr Pepper, the Snapple tea and fruit-based drinks and 7 Up.

Cadbury and Schweppes merged in 1969, but retained their separate brand identities, as sweets and drinks manufacturers respectively.

Source: CITY A.M.

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