After weeks of speculation, Carlsberg has agreed a £3.3 billion deal to take over soft drinks firm Britvic, as well as acquire Marston’s stake in its brewing joint venture.
The move for Britvic, which the Danish brewer announced this morning, sees the recommended offer at 1,315p a share, which would bring a total value of £3.3bn, and above the shares closing at 1,201p a share on Friday.
According to the brewer, the deal is a premium of around 36% compared to the price before speculation about the deal last month, when Britvic shares were around 97op.
Alongside the Britvic deal, Marston’s also sold its 40% stake in the Carlsberg Marston’s joint venture, which includes the production of traditional beers such as Pedigree, to a Carlsberg subsidiary for around £200m.
The move means Marston’s will now focus solely on its pub property.
Britvic dismissed previous bids as undervaluing the business, which includes soft drinks brands such as Robinsons, Tango, Fruit Shoot, J2O and Aqua Libra.
Britvic is a major partner of PepsiCo and the fresh Britvic offer from Carlsberg follows last week’s assurances from the company that the relationship will continue. It means PepsiCo has agreed to waive the change-of-control clause in the performance arrangements it has with Britvic. This would otherwise come into effect in the event of Carlsberg’s acquisition of Britvic, potentially ending its 20-year bottling franchise agreement with PepsiCo.
Britvic is also a leader in Ireland with brands such as MiWadi and Ballygowan and in France with brands such as Teisseire, Pressade and Moulin de Valdonne, as well as in Brazil with brands such as Maguary, Bela Ischia, Extra Power and Dafruta.
According to Carlsberg’s statement, the agreement is expected to take effect during the first quarter of 2025.
Grow
The Danish brewer said it was taking steps to “support Carlsberg’s growth ambitions” and would see a new unified drinks company called Carlsberg Britvic.
It said the deal “will be transformational” for Carlsberg’s UK business and will create a “significant opportunity for future brand development”, create suppliers for various drinks, an efficient supply chain and distribution network and provide customers with “comprehensive portfolios” of brands.
In addition, it will “further strengthen” the brewery’s close relationship with PepsiCo, which currently covers five markets in Western Europe and Asia.
Marston
Separately, the boards of Carlsberg and Marston’s have reached an agreement to acquire Marston’s 40% stake in Carlsberg Marston’s Limited (CMBC) for £206 million.
The CMBC transaction is subject only to the approval of Marston’s shareholders, with 100% ownership of CMBC being fully integrated into Britvic and CMBC. This transaction is expected to close in the third quarter of 2024.
Carlsberg Group CEO Jacob Aarup-Andersen said of the move that the brewery creates an “enhanced proposition” across the UK and other markets in Western Europe.
He said it was an “attractive” offer for shareholders and he was “thrilled” to expand the partnership with PepsiCo and “(believe) the long-term opportunities will be very beneficial for both companies.”
He said: “We look forward to welcoming Britvic employees to the Carlsberg family and creating an exciting combined company for all employees. We are committed to accelerating trade and supply chain investment at Britvic and are confident that Carlsberg Britvic will become the preferred multi-beverage supplier for UK customers with a comprehensive portfolio of market leading brands.
Building
PepsiCo Europe CEO Silviu Popovici added that the firm “looks forward to building on our long-standing and successful partnerships with Carlsberg and Britvic” and the deal will create “even stronger sales and distribution capabilities” for winning brands in key markets. .
“We look forward to continuing to expand the partnership to other important markets in the future,” he said.
Disturbing
Commenting on CAMRA’s sale of the rest of its brewing operations, CAMRA chairman Nik Antona said it was a “worrying development” for Britain’s brewing heritage as the remaining brewing assets were transferred to “a global brewing company that has already presided over the closure of historic breweries. ‘ such as Jennings in Cumbria and Charles Well Eage in Bedford.
He said: “CAMRA is concerned that this announcement could lead to a further erosion of the UK’s rich brewing history in favor of conglomerate global breweries – and in particular the commitment to cask brewing.
“The consolidation of the brewing industry into a few large international players is eroding our brewing heritage, consumer choice, the diversity of beer in pubs across the country and market access for small, independent producers.
“That Marston’s pubs continue to be subject to an anti-competitive supply relationship from Carlsberg Marston’s Brewing Company is also a cause for concern, limiting customers’ choice of great locally produced beer and cider from independent producers across the country.”