When Cadbury Schweppes signalled its intention to acquire 100% of the businesses and assets of the Adams division from Pfizer Inc for a gross consideration of $4.2bn, a small group of banks swiftly and discreetly arranged financing, providing Cadbury Schweppes with a fully underwritten facility to enable a bid to be tabled pre-Christmas 2002.
The $6.2bn syndicated facility was arranged to finance the acquisition, to refinance existing debt with Cadbury Schweppes and for general ongoing corporate purposes. The mandated lead arrangers held their underwriting commitment over the year-end, a potentially uncomfortable position for some banks when set against the backdrop of an uncertain geo-political scenario.
The deal was launched in February, and Cadbury Schweppes was downgraded as a result of the acquisition. Market talk suggested the facility was keenly priced and would only meet the hurdle requirements of relationship banks. However, the syndication was a success, with 20 banks joining the lead arrangers and the final bank group comprising 16 new banks for the company.
