UPDATE 2-Cadbury sells last drinks unit to Asahi for $811 mln

(Adds detail, background)

By Matt Scuffham

LONDON, Dec 24 (Reuters) - British confectionery maker Cadbury Plc (CBRY.L) agreed to sell its Australian beverage business to Asahi Breweries (2502.T) for 550 million pounds ($811 million), completing its exit from soft drinks.

The London-based maker of Dairy Milk chocolate said earlier this month it intended to sell the business, which generates annual sales of 300 million pounds from brands including Schweppes, Cottee's and Solo.

The sale marks Cadbury's full retreat from soft drinks having spun off its North American beverage business Dr Pepper Snapple in May. It has refocused on the resilient confectionery sector where its brands include Trident gum, Halls cough drops, Roses chocolates and Wispa.

Asahi and other Japanese brewers have been looking to diversify by expanding overseas and into non-alcohol drinks and food, as the Japanese beer market is seen by analysts as being mature and low growth.

In October, privately-held brewer Suntory Ltd agreed with French food group Danone (DANO.PA) to buy its Australia and New Zealand Frucor fruit juice unit for more than $770 million.

Cadbury said on Wednesday the sale agreement is subject to a right of negotiation granted to Coca-Cola Co (KO.N) in 1999, under which the U.S. company has the option until March 2009 to negotiate with Cadbury to buy the business.

Cadbury said it would carefully consider such an offer if it is made, including the price and likelihood of receiving necessary regulatory and other consents.

If no agreement is reached with Coca-Cola, Cadbury will enter into a binding sale and purchase agreement with Asahi.

Analysts had previously put a valuation of around 400 million pounds on the business.

Cadbury said it expects pre-conditions to closing the sale will have been completed by the end of April next year.

The group said cash proceeds from the disposal had been earmarked towards repaying a 600 million euro bond which matures in June next year.

At 1045 GMT, shares in Cadbury were down 0.8 percent at 587 pence, with the FTSE 100 down 1 percent on the day.

Asahi was advised by Nomura (8604.T) and Rothschild [ROT.UL] on the deal. (Editing by David Holmes)