Carlsberg buys Britvic and acquires Marston’s JV stake

Carlsberg has agreed a £3.3bn deal to takeover soft drinks firm Britvic following weeks of speculation, as well as acquiring Marston’s stake in its brewing joint venture.

The move for Britvic, which was announced by the Danish brewer this morning, sees a recommended offer at 1315p per share, which would deliver an overall value of £3.3bn, and above the shares closing at 1201p shares 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’s shares were at around 97op.

Alongside the Britvic deal, Marston’s has also sold its 40% stake in the Carlsberg Marston’s joint-venture, which includes the production of heritage ales such as Pedigree, to a subsidiary of Carlsberg for around £200m.

The move means Marston’s is now focusing solely on its pub estate.

Previous offers had been rebuffed by Britvic as undervaluing the firm, which includes soft drinks brands such as Robinsons, Tango, Fruit Shoot, J2O and Aqua Libra.

Britvic is the main partner for PepsiCo, and the fresh offer to Britvic from Carlsberg follows assurances about the continuation of this relationship last week from the company. It means that PepsiCo has agreed to waive the change-of-control clause in the bottling arrangements it has with Britvic. This would have come into effect under an acquisition of Britvic by Carlsberg otherwise, potentially terminating its 20 year franchise bottling deal with PepsiCo.

Britvic is also an industry 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.

It is expected that the deal will become effective during the first quarter of 2025, according to the statement from Carlsberg.

Growth

The Danish brewer said it was making the move to “support Carlsberg’s growth ambitions” and will see a new single beverage company called Carlsberg Britvic.

It said that the deal “will be transformative” for Carlsberg’s UK business creating “considerable opportunity for the future development of brands”, creating a multi-beverage supplier of scale, an efficient supply chain and distribution network, and provide customers with a “comprehensive portfolio” of brands.

In addition it will “further strengthen” the brewer’s  close relationship with PepsiCo, which currently spans five markets across Western Europe and Asia.

Marston’s

Separately the boards of Carlsberg and Marston’s have reached agreement on the acquisition of Marston’s 40% stake in Carlsberg Marston’s Limited (CMBC) for a sum of £206m.

The CMBC Transaction is conditional only on the approval of Marston’s shareholders, with the 100% ownership of CMBC full integrated into Britvic and CMBC. This deal is anticipated to close in the third quarter of 2024.

Carlsberg Group CEO Jacob Aarup-Andersen said about the move that the brewer was creating an “enhanced proposition” across the UK and other markets in Western Europe.

He said it was an “attractive” offer for shareholders, and was “excited” about expanding its partnership with PepsiCo and “believe(s) that the longer-term opportunities will be very beneficial for both companies.”

He said: “We look forward to welcoming Britvic’s employees into the Carlsberg family and creating an exciting, combined company for all employees. We are committed to accelerating commercial and supply chain investments in Britvic, and we are confident that Carlsberg Britvic will become the preferred multi- beverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands.”

Building

CEO of PepsiCo Europe Silviu Popovici added that the firm was “looking forward to building on our long-standing and successful partnerships with both Carlsberg and Britvic” and the deal would create “even stronger sales and distribution capabilities” for its winning brands in important markets.

“We look forward to continuing to expand the partnership into further important markets in the future,” he said.

Worrying

Commenting on Marston’s selling the remainder of its brewing operations, CAMRA Chairman Nik Antona said it was a “worrying development” for Britain’s brewing heritage with its remaining brewing assets being transferred to a “global brewing business which has already presided over the closure of historic breweries”, such as Jennings in Cumbria and Charles Well Eage in Bedford.

He said: “CAMRA fears that this announcement could lead to a further erosion of the UK’s rich brewing history for the benefit of conglomerate global brewers – and particularly the commitment to brewing cask.

“The consolidation of the brewing industry into just a few large, international players erodes our brewing heritage, consumer choice, the diversity of beer in pubs across the country and the access to market for small, independent producers.

“Having Marston’s pubs continuing to be subject to an anti-competitive supply tie by Carlsberg Marston’s Brewing Company is also a cause for concern, limiting choice for customers of great locally produced beer and cider from independent producers nationwide.”