The right mix

Is the Carlsberg-Britvic deal a good one? Well, it depends upon whose side you are looking from.

Prior to the announcement, the Danish brewing giant had trouble convincing the market that an acquisition of Britvic was a worthy consideration. Whatsmore, the two companies’ shares moved in opposite directions after it was revealed in June that Britvic rejected two takeover proposals earlier in the month.

A few weeks later and a takeover has been thrashed out and agreed. The deal helps Carlsberg scale-up in the UK market through soft drinks. In fact, Carlsberg said the deal would give it access to “appealing long-term growth opportunities” in soft drinks. A single integrated beverage company in the UK named Carlsberg Britvic will be created.

Britvic’s non-executive chair Ian Durant said the board believes that the “strategic merits of this offer are compelling,” and the offer provides shareholders with the opportunity to receive the “certainty of cash consideration that reflects the current strength and medium-term prospects of the Britvic business”.

The deal will certainly help Carlsberg on the foodservice side with pubs etc and its not insignificant bottling agreement. Both companies are PepsiCo bottlers, Britvic in the UK and Carlsberg in five countries. Britvic signed a 20-year franchise bottling agreement with PepsiCo in 2020, through which it produces and distributes products such as Pepsi Max, 7UP and Lipton ice tea.

The Danish lager maker’s takeover represents ‘supports its overall growth ambitions’ and, furthermore, it will also build on Carlsberg’s footprint in Western Europe.

Carlsberg’s intention is to accelerate commercial and supply chain investments in Britvic, and drive  the future growth of the business. An all beverage company appears to be one of the aims. Can the firms be merged successfully – are beer and soft drinks a good mix?


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