The brands include Schweppes, Dr Pepper, Canada Dry and Crush. In 1997, these businesses generated 56 million pounds ($93 million) trading profits, representing nine percent of the group total. The sale price represents 20 times trading profits.

Total tax and expenses related to the disposal -- which excludes South Africa and France -- will be around $350 million.

Cadbury chief executive John Sunderland said the deal would allow the UK company to develop its global confectionery and US drinks businesses.

"These brands are famous and profitable", he said. "However, we have recognised that outside the USA they can be more successfully grown within the broader international infrastructure which Coca-Cola has established over many years."

Sunderland said the deal would not face competition problems with European Union authorities in Brussels.

"Brussels is not affected as it does not come under the jurisdiction of the European Union...We don't reach the required hurdle rate in order to come under that jurisdiction," he said.

Sunderland noted that the total turnover of the businesses being sold was only around 200 million pounds, with an overall market share of three per cent in more than 120 markets.

Coca-Cola's chief executive Doug Ivester said the deal would give the US soft drinks giant segments of markets where it did not currently have significant entries.

"The Cadbury Schweppes brands will be a wonderful addition to the core brands of the Coca-Cola Company," he said.

Shares in Cadbury jumped on the news, trading up 37-1/2 pence or four per cent at 972P as stockbroker Dresdner Kleinwort Benson upgraded the stock to "buy" from "add".

"This is a very strong deal at a fantastic price," said one industry analyst at a US investment house.

"The management are obviously determined to enhanceshareholder value. It leaves Cadbury more profitable, cash rich and in a strong position for a share buy-back next year."

The value of net assets linked to this deal was 155 million pounds as on January 3, 1998. The transaction is expected to be broadly neutral to earnings in the first year following disposal.

In a seperate transaction, Cadbury said it would also sell its bottling and related businesses outside the US for around 500 million pounds.

Cadbury is yet to seek a buyer for these businesses but said it expects to complete the sale through a number of transactions over the next six to 12 months.

The company also said it would use the proceeds, likely to be available in the second half of 1999, for developing Cadbury Schweppes' business organically.

It also said: "A share buyback programme remains under review".