Chicago Tribune

Cadbury Schweppes PLC, the British candy and beverage giant, said Thursday it agreed to buy Procter and Gamble Co.'s Crush International unit for $220 million.

Crush was headquartered in north suburban Evanston before it was acquired by Procter & Gamble in 1980. Crush headquarters moved to Cincinnati, Procter & Gamble's home base, shortly thereafter.

The cash acquisition would give Cadbury the Crush brands in North America, Europe, Latin America, the Middle East and Africa. The unit, which includes Crush soft drinks and Hires root beer, had sales of $71 million for the first half of this year.

Combining Crush brands with Cadbury's existing drinks businesses would give the company a 4.7 percent share of the U.S. soft drinks market, up from 3.6 percent, Cadbury said. Its share of the Canadian market will jump to 15.1 percent from 10.8 percent, it said.

Analysts said Cadbury's relatively small share of the total market has made its role difficult. Coca-Cola sells an estimated 46 percent of the world soft drink market, followed by Pepsi-Cola with an estimated 22 percent. Cadbury's share is about the same as Dr Pepper and 7 Up.

Procter & Gamble, which had $21.4 billion in sales in the 1988-89 fiscal year, said it was selling the Crush unit to concentrate "on other strategic opportunities in the beverage market." Its other beverage businesses include Folgers coffees and Citrus Hill juices.

Analysts said the Crush unit has lost market share in the U.S. since Procter acquired it. Part of the problem, they said, is that Procter wanted to distribute the product directly to supermarket warehouses, bypassing some bottlers.

Crush, which the U.S. consumer products conglomerate has been attempting to sell in a restructuring, brings Cadbury Schweppes operations in North America, Britain, Latin America, the Middle East and Africa.

In addition to Crush and Hires, the unit's brand names include Pure Spring ginger ale, Sun Drop citrus fruit drinks and Gini bitter lemon.

Cadbury Schweppes is Britain's No. 1 candy seller and a leader internationally in soft drinks and tonic water.

Cadbury Schweppes Chief Executive Dominic Cadbury called the acquisition an "exceptional opportunity" that will increase the group's global drinks volume by 30 percent.

He said it would make the company more competitive in international beverage markets, which show promising growth.

"It's one of the major brand groupings in the world," said Cadbury Schweppes' chairman, Sir Graham Day, adding that Cadbury Schweppes intended to expand both its sweets and drinks businesses by acquisition.

The announcement was accompanied by a report that Cadbury's net income rose 16 percent for the first half of 1989, to $97.8 million from $84.5 million.

© 1989