Cadbury Schweppes buys Adams in $4.2bn deal

Cadbury Schweppes, the company that grew from John Cadbury's shop in Birmingham, has agreed to buy the chewing gum and sweets business Adams from the American drugs company Pfizer for $4.2 billion.

The deal, announced in December, will make Cadbury Schweppes the largest confectionery company in the world by sales.

Gum and sweets

Adams makes some of the world's best known chewing gum and sweet brands, including Trident, Dentyne and Halls, the throat sweet. Its products are sold in dozens of countries, with particularly strong sales in the Americas.

The purchase will give Cadbury Schweppes a leading position in the chewing gum market, one of the fastest growing parts of the confectionery industry. The company has been looking for ways to grow, and gum is seen as a major opportunity.

From Bull Street to the world

The Cadbury story began in Birmingham in 1824, when John Cadbury opened a shop on Bull Street selling tea, coffee and drinking chocolate. His sons, George and Richard, later moved the business to a new factory in the countryside south of the city, which they named Bournville.

The brothers built a model village around the factory, with good quality houses, parks and schools for their workers. Bournville remains one of the best known examples of a planned community in Britain.

The company merged with Schweppes, the drinks maker, in 1969, and has grown through a series of acquisitions into a global business, with brands such as Dairy Milk, Creme Egg, Dr Pepper and Snapple.

What it means for Bournville

The Bournville factory remains the heart of Cadbury's chocolate business in Britain, making Dairy Milk and many other favourites. Cadbury World, the visitor attraction at the site, draws hundreds of thousands of people each year.

The deal is not expected to have any immediate effect on jobs at Bournville. But workers and local people will be watching closely to see how the company develops as it grows larger and more international.

Some analysts have warned that the company is taking on a large amount of debt to pay for the deal, and that it will need to cut costs to make it pay. Others believe the purchase will make the company stronger and better able to compete with its global rivals.

A changing industry

The confectionery industry has been changing rapidly, with big companies buying up smaller ones to build global brands. Cadbury Schweppes competes with giants such as Nestle, Mars and Hershey.

The Adams deal is one of the biggest in the industry's history, and puts Cadbury Schweppes at the top of the table.

For Birmingham, it is a reminder of how far a small shop on Bull Street has come in less than two centuries.