Analysts are mulling over the possible candidates likely to make a bid for Cadbury Schweppes’ European drinks unit.

Cadbury announced yesterday that it had decided to sell it European beverages business following a strategic review which found that its confectionary and other beverage businesses had greater potential for higher growth and returns.

Analysts said that drinks giant PepsiCo was the most likely trade buyer and Coca-Cola could not be ruled out, although it may face competition issues.

Analysts also lined up private equity groups Carlyle Group, Cinven and Lion Capital as likely candidates.