£3.3bn takeover of Britvic gets green light from regulator

Credit: Carlsberg Marston’s

Carlsberg’s £3.3bn takeover of soft drinks giant Britvic has been approved by the Competition and Markets Authority (CMA).

The CMA said in September that it was considering whether the deal could result in a substantial lessening of competition, but gave the merger the go-ahead one day before the deadline for the first phase of its investigation.

The brewer has outlined plans to make £100m of savings over the next five years. Unite the union had warned in July that Carlsberg’s plans to axe 1% of jobs across both businesses could lead to hundreds of UK workers losing their jobs. 

Following the deal, Carlsberg Marston’s Brewing Company (CMBC) announced that Wolverhampton’s Banks’s Brewery will close next autumn as part of a restructuring of its brewery network, putting almost 100 jobs at risk.

CMBC said the move was in response to the decision by Mahou San Miguel not to renew its long-term exclusive licence partnership from 2025 which has left “significant excess capacity”.

Instead, the brewer is turning its attention to sites in Northampton and Burton, with a long-term ambition to establish Marston’s Brewery in Burton as a national centre for craft beer and traditional ale brewing in the UK.

More than £6m will be invested in Burton, including the refurbishment of its cask ale line to brew traditional British ales, as well as developing capabilities for brewing innovative, contemporary craft ales.

As part of CMBC’s logistics strategy, the business will also invest to develop a new logistics depot in the Black Country region, to support its nationwide secondary logistics network.

The deal for Britvic was agreed in July after the soft drinks giant rejected two previous bids.

The Danish brewer is offering 1,290 pence per share for Britvic, with a dividend that gives shareholders 1,315 pence per share, as it looks to build on Britvic’s presence in Great Britain, Western Europe and Brazil.

A deal was already struck with PepsiCo to waive a change-of-control clause as part of its long-term bottling agreement with Britvic, removing a potential block to the acquisition.

The Robinsons and Tango maker has its headquarters in Hemel Hampstead but comes from roots in Somerset and has factories in Rugby, London and Leeds, as well as offices in Tamworth and Solihull.

A single integrated beverage company will be created through the deal and known as Carlsberg Britvic. It will be led by a management team comprised of individuals from Carlsberg, Britvic and CMBC and take advantage of the “highly synergistic relationship between beer and soft drinks”.

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