Carlsberg has agreed a £3.3bn deal to acquire soft drinks company Britvic, following weeks of speculation. It will also buy Marston’s stake in the brewing joint venture.
The move for Britvic, announced by the Danish brewer this morning, involves a recommended offer of 1,315p per share, which would value the deal at £3.3bn, up from a closing price of 1,201p per share on Friday.
The brewer said the deal represents a premium of around 36% compared with the price before speculation about the deal last month, when Britvic shares were trading at around 97%.
In addition to the Britvic deal, Marston’s has also sold its 40% stake in the Carlsberg Marston’s joint venture, which includes the production of heritage beers such as Pedigree, to a subsidiary of Carlsberg for around £200 million.
The move means Marston’s now focuses solely on its pubs.
Britvic had rejected previous bids on the grounds that it undervalued the business, which also includes soft drinks brands Robinsons, Tango, Fruit Shoot, J2O and Aqua Libra.
Britvic is PepsiCo’s key partner and Carlsberg’s new offer to Britvic follows the company’s assurances last week that the relationship would continue. It means that PepsiCo has agreed to waive the change-of-control clause in its bottling agreements with Britvic, which would otherwise have been triggered by a Carlsberg takeover of Britvic, potentially ending the company’s 20-year franchise bottling agreement with PepsiCo.
Britvic is also the market leader in Ireland with brands including MiWadi and Ballygowan, in France with brands including Teisseire, Pressade and Moulin de Valdonne, and in Brazil with brands including Maguary, Bela Ischia, Extra Power and Dafruta.
The deal is expected to become effective in the first quarter of 2025, according to a statement from Carlsberg.
Grow
The Danish brewer said it was making the move to “support Carlsberg’s growth ambitions” and that it will create a new, unique drinks company called Carlsberg Britvic.
The deal was said to be “transformative” for Carlsberg’s UK business and “create significant opportunities for future brand development”, create a large-scale multi-drinks supplier, create an efficient supply chain and distribution network and offer customers an “expanded portfolio” of brands.
In addition, it will further strengthen the brewer’s close relationship with PepsiCo, which currently covers five markets in Western Europe and Asia.
Marstons
The boards of Carlsberg and Marston’s have separately reached agreement for the acquisition of Marston’s 40% stake in Carlsberg Marston’s Limited (CMBC) for £206 million.
The CMBC transaction is subject only to Marston shareholder approval, with 100% ownership of CMBC fully integrated into Britvic and CMBC. This deal is expected to close in the third quarter of 2024.
Carlsberg Group CEO Jacob Aarup-Andersen said of the move that the brewer created an “enhanced offering” in the UK and other markets in Western Europe.
He said it was an “attractive” offer for shareholders, and was “excited” about expanding the partnership with PepsiCo and “believes the longer-term opportunities will be very positive for both companies.”
He said: “We look forward to welcoming Britvic’s employees into the Carlsberg family and creating an exciting combined business for all employees. We are committed to accelerating commercial and supply chain investment in Britvic, and we are confident that Carlsberg Britvic will become the multi-beverage supplier of choice for UK customers with an expanded portfolio of leading brands.”
Building
PepsiCo Europe CEO Silviu Popovici added that the company “looks forward to building on our long-standing and successful partnerships with both Carlsberg and Britvic” and that the deal would create “even stronger sales and distribution opportunities” for its winning brands in key markets.
“We look forward to expanding the partnership to additional key markets in the future,” he said.
Worry
Commenting on Marston’s sale of the remainder of its brewing business, CAMRA chairman Nik Antona said it was a “worrying development” for Britain’s brewing heritage as the remaining brewing assets are being transferred to a “global brewer already responsible for 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 favour of global conglomerate brewers – and in particular its commitment to cask brewing.
“The consolidation of the brewing sector into just a few large, international players is eroding our brewing heritage, consumer choice, the diversity of beer in pubs across the country and access to the market for small, independent producers.
“The fact that Marston’s pubs continue to be subject to an anti-competitive supply agreement with Carlsberg Marston’s Brewing Company is also a concern as it limits customers’ choice of great locally produced beer and cider from independent producers across the country.”