Britvic’s board today (8 July) threw its weight behind an improved takeover offer worth £3.3bn ($4.2bn) from brewing giant Carlsberg.
The bid was the third the Danish brewer had made for the UK soft-drinks group, which said last month it had rejected two previous offers.
In a separate announcement, Carlsberg said it had agreed to acquire Marston’s 40% stake in their brewing joint venture Carlsberg Marston’s Brewing Company (CMBC) in the UK.
On 21 June, it was revealed Britvic had turned down two multi-billion-pound takeover bids from the Tuborg brewer that month.
Announcing the acceptance of its latest bid today, Carlsberg said it intends to “accelerate commercial and supply chain investments in Britvic, driving the future growth trajectory of the business”. It will create a single integrated beverage company in the UK, to be named Carlsberg Britvic.
Carlsberg Britvic shall be led by a management team comprised of staff from each of Carlsberg, CMBC and Britvic. The enlarged business will have a portfolio of brands across the beer and soft drinks categories.
The company already markets its own soft drinks, with brands including Tuborg Squash Light in Denmark, Tuborg Soda in Greece and Xixia in China.
Jacob Aarup-Andersen, the CEO of Carlsberg, said: “With this transaction, we are combining Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and markets in Western Europe.”
He added: “We are committed to accelerating commercial and supply chain investments in Britvic, and we are confident that Carlsberg Britvic will become the preferred multi-beverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands.”
As part of the deal, Carlsberg has secured an agreement from PepsiCo to waive a clause in its bottling contract with Britvic that would come into effect should the takeover happen. Carlsberg distributes PepsiCo drinks in Norway and Switzerland.
Ian Durant, non-executive chair of Britvic, said: “Britvic is an outstanding business with a strong heritage built on its portfolio of family-favourite brands, long-standing customer relationships, a well-invested supply chain infrastructure and a fantastic team of people across multiple markets.”
He added: “The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors.
“Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success.”
The deal will need the backing of 75% of Britvic investors in a shareholder vote, it revealed in a statement.
Britvic shares rose 4.63% today to £12.66. In its third-quarter results, also announced today, total group revenue grew 6.3% to £503.9m, while its Great Britain business saw revenue jump 6.6%.
