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LONDON : Britain's Cadbury Schweppes said on Tuesday it would slash 7,500 jobs, or 15 percent of workers at its confectionery division, in a major restructuring after the likely sale of its US soft drinks unit.
The group, which makes Dairy Milk chocolate, said in a statement that the process to sell Americas Beverages was "actively underway," while 7,500 jobs would go at its confectionery arm which employs some 50,000 staff worldwide.
Trade union Unite, which has more than 2,000 members working for Cadbury in Britain, warned that the potential job cuts were a "grave concern."
Cadbury, which also produces Trident chewing gum, said on Tuesday that it sought to ramp up its profit margins by 2011.
"Our target of increasing margins ... will be driven by a major group-wide cost reduction initiative which will result in the closure of around 15 percent of our confectionery sites and a 15 percent reduction in headcount," it said.
The headcount reduction is the equivalent to about 7,500 job losses.
"The separation of confectionery and Americas Beverages is progressing well and we continue to pursue a twin track process of either a sale or de-merger," the statement added.
Cadbury Schweppes will be renamed Cadbury following the successful separation of its US soft drinks business.
Analysts value Americas Beverages at up to 8.0 billion pounds (11.8 billion euros, 15.8 billion dollars), while private equity consortia are thought to be battling for the unit that includes Schweppes, Dr Pepper and 7-Up among its brands.
"The sale process is actively underway, and following expressions of interest, we now believe that a sale is the more likely outcome," the statement added.
Meanwhile Cadbury Schweppes chief executive Todd Stitzer hit back at claims his group was pushed into breaking up its business by activist investor Nelson Peltz.
Speaking to reporters, Stitzer maintained the separation was the result of two years of deliberations and followed discussions with numerous shareholders.
"No one shareholder or group of shareholders had any over-influence on that decision," Stitzer said.
"The board made a decision based on its perspective that we had created two very strong, stand-alone businesses, and that there would be a terrific value-creation opportunity for shareholders in the separation," he added.
Peltz, who has built a reputation for purchasing stakes in businesses and forcing through operational change, took a holding of just under 3.0 percent in Cadbury on March 13.
Cadbury Schweppes had announced on Monday the purchase of Japanese candy maker Sansei Foods in a friendly takeover bid which valued the group at 13.75 billion yen (about 111 million dollars).
The share price in Cadbury Schweppes finished on Tuesday 0.85 percent lower at 700 pence on London's FTSE 100 share index, which in turn ended 0.80 percent down at 6,650.20 points. - AFP/de
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