(qlmbusinessnews.com Tues. 9th July, 2024) London, UK —

“Historic £3.3 Billion Carlsberg-Britvic Merger Shakes Up UK Drinks Market”

Danish brewing giant Carlsberg has finalised a £3.3 billion deal to acquire the renowned UK soft drinks company Britvic.

Britvic, known for its popular brands such as J20, Robinsons, and R White’s lemonade, accepted the £13.15 per share offer after previously rejecting Carlsberg’s lower bids, deeming them insufficient.

In an announcement on Monday, Carlsberg confirmed that Britvic’s board had unanimously endorsed the deal. The acquisition offer includes £12.90 in cash for each Britvic share, plus a special dividend payment of 25p per share. The merger will form a new entity named Carlsberg Britvic.

Following the announcement, Britvic shares surged by 4.5% to £12.65, positioning it among the top performers on the FTSE 250.

The acquisition requires the approval of 75% of Britvic shareholders through a vote.

Established in the 1930s as the British Vitamin Products Company, Britvic has grown its presence to 100 countries, including key markets like Brazil, France, and Ireland. It also holds an exclusive licence with PepsiCo in Great Britain and Ireland to produce and distribute Pepsi Max, 7UP, Rockstar Energy, and Lipton Ice Tea.

As part of the agreement, Carlsberg has arranged for PepsiCo to waive a contract clause that could have voided the bottling agreement upon a change in ownership.

Carlsberg, Britvic

Jacob Aarup-Andersen, Carlsberg's CEO, stated, “This transaction merges Britvic's premium soft drinks portfolio with Carlsberg's robust beer offerings and market access, enhancing our presence in the UK and Western Europe.”

Carlsberg anticipates annual cost savings of approximately £100 million over the next five years through procurement, supply chain efficiencies, and administrative streamlining.

Ian Durant, Britvic's non-executive chairman, remarked, “The proposed merger establishes an international group poised to exploit growth opportunities across various beverage sectors. Crucially, Carlsberg's agreement with PepsiCo provides a robust foundation for ongoing success amidst increasing industry consolidation.”

Additionally, Carlsberg revealed a separate agreement to acquire Marston’s minority stake in their joint venture, Carlsberg Marston’s, now the UK's fourth-largest brewing company. Despite the buyout, Marston’s will continue its partnership with the newly enlarged entity, retaining its long-term supply and distribution agreements.

This deal signifies the end of Marston's extensive history as an independent brewer, dating back to its origins as Wolverhampton & Dudley Breweries in 1875. Carlsberg will now fully control ales like Hobgoblin, Brakspear, Pedigree, and Wainwright.

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