Carlsberg To Buy Britvic, Take Over Marston's Joint Venture

By Reuters
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Carlsberg To Buy Britvic, Take Over Marston's Joint Venture

Carlsberg has agreed to buy British soft drinks maker Britvic for £3.3 billion (€3.9 billion), and buy out UK pub group Marston's from its joint venture with the Danish brewer.

Carlsberg said that it plans to create an integrated beer and soft drinks company in Britain.

The new Carlsberg Britvic business will also strengthen the Danish group's partnership with PepsiCo, which has bottling deals with both Carlsberg and Britvic.

Carlsberg raised its bid for Britvic to 1,315 pence per share - comprising cash and a special dividend of 25 pence a share - after the British company rejected 1,250 pence per share last month.

'Highly Attractive'

In a statement, Carlsberg said, 'Carlsberg recognises that Britvic is one of the leading soft drinks businesses in Great Britain, Western Europe and Brazil. Carlsberg believes that the acquisition represents a highly attractive opportunity for Carlsberg and supports its overall growth ambitions.


'The acquisition will build on Carlsberg's very successful bottling business in the Nordic region, and deepen and strengthen its footprint in Western Europe, an important region that offers stable and attractive growth prospects. Carlsberg's intention is to accelerate commercial and supply chain investments in Britvic, driving the future growth trajectory of the business.'

Carlsberg said that it believed the Britvic integration could deliver annual cost savings and efficiency improvements of around £100 million (approximately £75 million post-tax). Carlsberg expects these savings to be realised over the five years following the completion of the acquisition.

Carlsberg Marston's Limited

Marston's said on Monday that it would sell its 40% stake in its brewing joint venture Carlsberg Marston's Limited for £206 million (€243.7 million) in cash.

Carlsberg is looking to expand its focus on categories including cider, hard lemonade, hard seltzers and ready-to-drink cocktails, to capitalise on growing appetite for beverages outside the traditional beer category.


The Marston's transaction is expected to close in the third quarter of this year, the company said.

Britvic Q3 Results

Britvic reported strong trading results for Q3, with revenue reaching £502.9 million, marking a 6.3% increase despite a challenging prior year comparison, it said in a statement.

Demand for Britvic's brands remains robust as the company enters the key summer trading period, it added.

Analyst Viewpoint

Commenting on the deal, Russ Mould, investment director at AJ Bell, said, “Carlsberg has prevailed in its pursuit of soft drinks firm Britvic, further thinning the ranks of the UK market and depriving investors of an opportunity to buy a company and stock which has enjoyed steady success since its 2005 IPO.


“The writing was on the wall for Britvic as an independent entity when it emerged Carlsberg had secured a waiver on a change of ownership clause associated with a bottling contract Britvic enjoys with PepsiCo. Carlsberg wouldn’t have gone to the trouble of getting this detail if it wasn’t serious about getting the deal across the line.

“It probably isn’t the best price tag in the world for Britvic – only around 3% more in headline terms than a second bid, which Britvic rebuffed on the grounds it was being significantly undervalued – but it is a fairly weighty premium to the undisturbed share price. It also includes the helpful kicker of a 25p special dividend to be paid before the transaction goes through."

Additional reporting by ESM

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