Cadbury Schweppes has revealed plans to split its confectionery and Americas Beverages arms in two.
Cadbury chief executive Todd Stitzer said separating the operations would allow their management teams to focus better on boosting revenues and margins. Details will be revealed on 19 June, when the company releases a trading update.
Cadbury Schweppes' confectionery business includes brands such as Trident and Cadbury, while Americas Beverages includes 7Up and Dr Pepper. The move was announced on Thursday, two days after it emerged activist investor Nelson Peltz had acquired a 2.98% stake in Cadbury Schweppes.
Charlie Mills, analyst at Credit Suisse, said there was the possibility one of the businesses would be sold off. "It may demerge itself into two totally separate listed companies, or sell one side to a third party," he said. "I think a full demerger is most likely."
But Mills said he doubted the plan to split the business was Peltz's brainchild, as had been claimed in some quarters. "I suspect Cadbury has been thinking about this for some time and the process was accelerated by speculation," he said.
Last month Cadbury revealed 2006 pre-tax profit was down 12% to £738m on sales up 4% at £6.63bn.