Pernod Ricard was this morning set to sell its Orangina soft drinks business to Britain's Cadbury Schweppes, leaving the French group to focus on spirits after its recent purchase of Seagram's drinks business.
Cadbury and Pernod said the British group was close to buying Pernod's soft drinks business for 700 million euros. Pernod is set to become the world's third largest drinks group once the Seagram buy is approved while Cadbury ranks number three in global soft drinks behind Coca Cola and Pepsi.
Cadbury and Pernod have been in exclusive talks since last year, after Pernod's agreed sale of Orangina to Coca Cola was blocked by French competition authorities.
This deal, which will also require regulatory approval, involves the group's Orangina, Pampryl and Yoo-Hoo brands and related businesses in continental Europe, North America and Australia, Pernod said in a statement.
Cadbury Schweppes said the Orangina deal would enhance its earnings per share in the first year and that it saw significant synergies following the purchase.
The deal, which also gives Pernod the option to sell those same businesses to Cadbury Schweppes in the rest of the world, is important to Pernod which needs the cash to help cover the $3.15 billion it shelled out for 39% of Seagram.
Pernod bought Seagram's drinks businesses in partnership with Britains's Diageo late last year, when Seagram merged with France's Vivendi.
Under the previous negotiations with Coke, Orangina was to fetch $500 million. However since then Pernod has merged the soft drink maker, France's second biggest, with its US chocolate drink brand Yoo-Hoo and Pampryl, its fruit juice business.
Orangina Pampryl has turnover of 420 million euros while Yoo Hoo has sales of $140 million.
