City snapshot: Carlsberg agrees £3.3bn takeover offer with Britvic

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Carlsberg has struck a deal to buy Britvic for £3.3bn as the soft drinks group agreed to a renewed higher offer from the Danish brewer.

It comes after Britvic rejected two earlier offers from Carlsberg as they “significantly undervalued” the supplier of Robinsons, Fruit Shoot and the PepsiCo portfolio in the UK.

Under the terms of the agreement between the boards of the two groups, Carlsberg will pay 1,290p per Britvic share and an additional 25p to shareholders with a special dividend.

The 1,315p deal - which follows bids of 1,200p and 1,250p being rejected last month - represents a 36% premium to the Britvic closing price of 970p on 19 June before news of the potential takeover emerged.

Carlsberg said the acquisition represented a “highly attractive opportunity” for the group and supported its overall growth ambitions.

CEO Jacob Aarup-Andersen added the combination of the two groups created “an enhanced proposition across the UK and markets in Western Europe”.

Britvic chairman Ian Durant said the strategic merits of the offer were “compelling”.

“The proposed transaction creates an enlarged international group that is well-placed to capture the growth opportunities in multiple drinks sectors,” he added.

“Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success.”

Britvic’s board is unamimously recommending that shareholders vote in favour of the deal at an upcoming general meeting.

Carlsberg separately announced a £206m deal to buy the remaining 40% of its brewing joint venture with Marston’s. It follows an initial partnership struck in 2020 between the two, with Marston’s now to become a focused pub group.

The Danish brewer said it intended to create a single integrated beverage company in the UK, to be named Carlsberg Britvic.

The management team would be made up of individuals from Carlsberg, Carlsberg Marston’s and Britvic.

Aarup-Andersen said: “We are pleased that the Britvic board is unanimously recommending our offer to Britvic shareholders.

“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.”

PepsiCo, which already gave Carlsberg its blessing for a deal by waiving rights to cancel a longstanding licence with Britvic in the UK in the event of a takeover, said it looked forward to building on the “successful partnerships with both Carlsberg and Britvic”.

European CEO Silviu Popovici added: “We believe that the combination of Carlsberg and Britvic will create even stronger sales and distribution capabilities for our winning brands in important markets. We look forward to continuing to expand the partnership into further important markets in the future.”

Shares in Britvic jumped 4.4% to 1,263p this morning on the announcement, while Carlsberg rose 3.6% to DKK 867.20.

Morning update

Britvic also published a third-quarter trading update this morning, reporting “strong” trading despite lapping “tough” figures from a year ago.

Group revenues increased 6.3% to £502.9m in the three months to 30 June 2024 even as it faced into headwinds of poor weather across Europe, with volumes up 2.2%.

In Great Britain, sales rose 6.6% year on year, with the retail and hospitality channels in growth, while revenues in Brazil soared 48.1%.

Other international markets registered a 6.6% decline in sales, with growth in Ireland being offset by France and other countries.

CEO Simon Litherland said trading had been “strong” and demonstrated the strength of the portfolio of brands.

“Encouragingly this was achieved despite poor weather this year and a tough comparable from last year when revenue increased 9.9%,” he added.

“Demand for our brands remains strong, as we enter the key summer trading period. We have an exciting programme of marketing campaigns, giving us confidence that we will deliver an excellent full-year performance.”

Ocado has announced a continued expansion of its partnership with Japan’s Aeon, with plans to build a third CFC in the country.

The group entered an exclusive partnership with Aeon in 2019 to develop the online operations of the Aeon Next grocery business using the Ocado Smart Platform.

The first CFC opened in July 2023, serving customers in the Kanto region, and will be followed by a second due to go live in 2026.

Further CFCs are planned.

Tim Steiner said: “Today is an exciting moment for Aeon and Ocado’s relationship as we deepen our already strong partnership.

“As demonstrated by the state-of-the-art CFC live in Honda, Ocado is helping Aeon Next to provide a seamless online grocery experience to customers across Tokyo.

“We can’t wait to bring this service to even more customers in the years to come.”

The FTSE 100 opened flat at 8,206.19pts this morning.

Other risers alongside Britvic included Marston’s, jumping 19.2% to 36.6p, with Ocado also up 5.5% to 346.1p.

Early losers included Nichols, down 1.9% to 1,054.3p, and McBride, down 0.8% to 139.8p.