Carlsberg acquires Britvic in a £3.3bn takeover deal

In a significant development in the beverage industry, the UK soft drinks maker Britvic has agreed to a £3.3 billion takeover offer from the Danish brewer Carlsberg. This deal will bring together Britvic's popular mixers and soft drinks like Tango and Robinsons squash with Carlsberg's beer brands such as Carlsberg, Kronenbourg, and Holsten Pils. Carlsberg also revealed the acquisition of Marston's 40% stake in the Carlsberg Marston's Brewing Company for £206 million. Carlsberg's improved offer of £13.15 per share was accepted by Britvic after rejecting previous bids, citing undervaluation. The deal includes a cash component of £12.90 per share and a special dividend payment of 25p per share. The creation of a new enlarged group named Carlsberg Britvic is expected to enhance the relationship between Carlsberg and PepsiCo, with whom Britvic has an exclusive licensing agreement in the British Isles. The acquisition is anticipated to be earnings accretive immediately and value accretive within three years for Carlsberg. The company aims to achieve about £100 million in cost savings and efficiencies over five years. The deal is subject to approval by three-quarters of Britvic investors, and Britvic shares surged by 4.9% following the announcement. The enlarged business is poised to capitalize on growth opportunities in various drink sectors amidst increasing consolidation in the market. Additionally, Carlsberg has secured an agreement with PepsiCo to waive a clause in its bottling contract with Britvic that could have allowed cancellation in the event of a change of ownership. The acquisition also includes the takeover of Marston's minority stake in Carlsberg Marston's, solidifying Carlsberg's position as the fourth largest beer company in the UK. Marston's will transition away from its brewing roots, with Carlsberg taking control of popular ales like Hobgoblin, Brakspear, Pedigree, and Wainwright.