Cadbury Schweppes has announced that it is to sell its European Beverages business. Proceeds from the sale will be used to cut the group’s £4.3bn debt, with industry observers believing the sale could net Cadbury Schweppes up to £1.2bn. The company will concentrate on its American drinks business and confectionary products, which, it said "have greater potential for higher growth and returns". Cadbury Schweppes chief executive Todd Stitzer said: "Europe Beverages has a great portfolio of brands, a talented management team and strong routes to market. However, the potential for growth and value creation is greater in the group’s other operations, and therefore we believe it is in the best interests of our shareowners to investigate a sale of the business." The region’s third largest soft drinks concern, Cadbury’s Europe Beverages brands include Schweppes, Oasis and Orangina, among others, with 85% of sales in France Spain and Germany, shifting approximately 1.7 billion litres of drinks annually. With £116m underlying profit from operations in 2004, it made up 11% of Cadbury Schweppes total figure for that category. In contrast, over half the Group’s profits come from the US market, where Cadbury Schweppes owns such brands as 7Up, Dr Pepper and Mott’s Apple Juice. Some analysts believe that a private equity group will be the most likely buyer, and rumours abound that American private equity firm Carlyle Group is a leading the pack. Two others, Lion Group and KKR, are also thought to be interested. Coca Cola, which took over Cadbury’s UK and Ireland soft drink business, is likely out of the running due to anti-trust concerns. A bid from PepsiCo could also attract the regulators’ attention. Cadbury’s shares rose 2.6% to 561p in the wake of the sale announcement.