We are expecting even more headlines like this before this snowball stops rolling.

Cadbury Schweppes Plc, the world's largest confectionery company, said it's extending the deadline for selling its U.S. drink business after "extreme volatility" in debt markets.

There's still "strong" interest from potential buyers, London-based Cadbury said today in a statement, adding that the timetable for the auction is "under review." Final bids for the unit, which makes Dr Pepper and 7 Up soda, were due within the next week, people familiar with the matter said on July 25.

Cadbury said in March that it would sell or spin off the unit following investor pressure. Turmoil in credit markets sent stock markets sliding this week on concern that companies won't be able to finance takeovers. This week, Kohlberg Kravis Roberts & Co.'s bankers failed to find buyers for $10 billion of loans to pay for the purchase of Alliance Boots Plc.

"It's a barometer -- this is telling us that getting deals done is difficult," said Martin Deboo, an analyst at Investec Securities in London. "We're in very uncertain times."

Deboo yesterday cut his estimate for the sale price of the drinks unit to 7.2 billion pounds ($14.7 billion) from 8 billion pounds. He has a "hold" rating on the stock.

Two private-equity groups vying to acquire the division may offer less than initially planned as debt investors balk at financing takeovers, four people with knowledge of the bidding said this week.

(Continue reading this story on Bloomberg)

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