Carlsberg Group and Britvic PLC boards will recommend to shareholders that Carsberg buys the entire share capital of soft drinks maker Britvic in deal worth £3.3bn to create a single integrated company in the United Kingdom, to be named Carlsberg Britvic.
It comes as the trend to low and no-alcohol drinks booms in the 18-24 age group with 4 our of 10 considering themselves occasional or regular users of alcohol alternatives and 4 in 10 saying that they don’t drink alcohol at all, according to this recent research by YouGov and Portman Group. This trend continues amongst adults where over a third now consider themselves to be occasional or regular users of alcohol alternatives.
Britvic, which is the largest supplier of branded still soft drinks and the number two supplier of branded carbonated soft drinks in Great Britain, owns brands including Robinsons, Tango, Fruit Shoot, J2O and Aqua Libra, and is the main partner for PepsiCo in the UK and Ireland with exclusive rights to manufacture, bottle, and sell brands including Pepsi, 7UP, and Lipton Ice Tea.Iy. The deal will need the backing of 75% of Britvic investors in a shareholder vote.
Separately the boards of Carlsberg and Marston’s plc have reached agreement on the acquisition of Marston’s 40% stake in its brewing joint venture, Carlsberg Marston’s Limited, for £206m (subject to shareholder approval), with the deal expected to close in the third quarter of this year. The move means Marston’s will focus solely on its pub estate.
Carlsberg Group CEO Jacob Aarup-Andersen said in a statement, “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 other markets in Western Europe.”
“The proposed transaction is attractive for shareholders of Carlsberg, supporting our growth ambitions and being immediately earnings accretive and value accretive in year three. We are excited about expanding our global partnership with PepsiCo and believe that the longer term opportunities will be very beneficial for both companies.
“We are pleased that the Britvic Board is unanimously recommending our offer to Britvic Shareholders. We look forward to welcoming Britvic’s employees into the Carlsberg family and creating an exciting, combined company for all employees. We are committed to accelerating commercial and supply chain investments in Britvic, and we are confident that Carlsberg Britvic will become the preferred multibeverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands.”
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. All these factors have supported a consistent track record of delivery for Britvic’s stakeholders over a sustained period of time.
“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.”
CEO of PepsiCo Europe Silviu Popovici said, “We are looking forward to building on our long-standing and successful partnerships with both Carlsberg and Britvic. We believe that the combination of Carlsberg and Britvic will create even stronger sales and distribution capabilities for our winning brands in important markets. We look forward to continuing to expand the partnership into further important markets in the future.”
Picture: Carlsberg Group CEO Jacob Aarup-Andersen