Cadbury Acquires Hawaiian Punch from P&G

London-based Cadbury Schweppes has agreed to buy Hawaiian Punch, America's leading brand of fruit punch, from household goods maker Procter & Gamble Co. for $203 million in cash. The deal will give Cadbury Schweppes an even bigger share of the American soft drinks market, where it already dominates the non-cola carbonated drinks business with its Dr Pepper, 7Up and Canada Dry brands.

The acquisition comes as little surprise to analysts, given Cadbury's stated goal of focusing on candy and American soft drinks after it completes a planned $1.85 billion sale of its non-U.S. beverage brands to Coca-Cola Co. later this year. With Hawaiian Punch, Cadbury should make inroads with younger American customers while avoiding head-to-head competition in the U.S. market with the cola giants Coca-Cola and PepsiCo Inc., said David Lang of the brokerage Investec Henderson Crosthwaite.

"It makes sense to add to what's already a very successful presence," Lang said.

Hawaiian Punch, which had annual sales last year of $133 million, will be integrated into Cadbury's Dr Pepper/7Up division. Around 70% of the volume will be distributed through the Dr Pepper/7Up franchised bottler networks. The remaining 30% will be distributed by Cadbury's Mott's Inc. fruit juice business and sold alongside Mott's apple juice and Rose's Lime Juice.

Cadbury is the world's No. 3 soft-drink vendor, with about 15% of the U.S. market, behind Coke's 44% and Pepsi's 31%. Its other soft drink brands include A&W Root Beer, Sunkist, Schweppes, Squirt and Crush.