Cadbury Schweppes has sold its European soft drinks arm for £1.27 billion.
Private equity groups Blackstone and Lion Capital have agreed to buy the business, which includes Orangina and Schweppes beverages.
The consortium of Blackstone and Lion have entered into a binding offer, while Cadbury needs to consult with its works committees in France, Germany and Belgium before the deal can be closed.
The proceeds will be used to reduce the group's net debt, which at June 2005 was £4.3 billion.
Cadbury's chief executive Todd Stitzer welcomed the sale and said following completion the group would be able to focus on its faster growing worldwide confectionery business and its other drinks operations in North America and Australia.
He said: "I'm delighted that within such a short time we have achieved a firm offer for Europe Beverages at a price which reflects the quality of its brands and the strength of its management team.
"Following completion of a deal, we will be able to focus on our faster growing confectionery and other beverage businesses."
But analysts said a streamlined group focusing on Cadbury chocolate and Adams gums, together with Dr Pepper and 7UP drinks in North America, may become a more attractive target for US predators such as Kraft Foods or Hershey.
Cadbury put the business, which has operations in Germany, Spain, Portugal, Belgium and France, up for sale in September after performing poorly.
Some three-quarters of sales come from its Schweppes, Orangina, TriNa, Oasis and La Casera brands.
Analysts said the business lacked growth and critical mass for Cadbury despite attempts to expand it with the purchase of France's Orangina and La Casera in Spain in recent years to build a business which makes ten per cent of group profits.
New York-based Blackstone and London-headquartered Lion Capital fought off other final offers from British buyout firm Permira and French private equity group PAI by offering the highest price and promising to be the fastest to complete a deal.
The price exceeded market expectations of £ 1 . 1 --1.2 billion, while the deal is expected to be completed in the first-quarter of 2006.
If Cadbury does not complete the deal it will have to pay a break fee of around five per cent of the offer value to the private equity groups, and then retain the business for twelve months.
" We're tremendously excited because in particular these are pretty rare quality brands to make it into private equity ownership," said Lyndon Lea, founding partner of Lion Capital, the former European arm of US-based Hicks Muse Tate & Furst.
Mr Lea expects the deal to close in January and then to hold on to the company for three to five years. Lion currently owns UK breakfast cereal business Weetabix and iconic shoe brand Jimmy Choo.