The Office of Fair Trading has referred the merger of AG Barr and Britvic to the Competition Commission, leaving the deal hanging by a thread.
The OFT said that the merger, first revealed in September last year, could reduce competition for the companies’ Irn Bru and Orangina brands.
However, in a statement Britvic revealed that because the deal had been referred to the CC, “the merger has now lapsed and Britvic confirms that the scheme will not proceed”.
It is waiting to hear more details from the OFT and will decide whether to work with the CC to pursue the deal, a spokeswoman said. As things stand, the earliest a deal could go ahead is six to nine months from now because it will need to gain shareholder approval again.
Britivic also revealed that its GB MD Simon Litherland had been promoted to CEO with immediate effect. Outgoing CEO Paul Moody is to retire but will be available for six months on a consultancy basis.
Amelia Fletcher, OFT chief economist and decision maker said: “The soft drinks industry is an important one for many consumers in Great Britain. People spend over £9bn each year on these drinks.”
“This merger will see the UK market reduce from three to two main players. Our investigation has identified competition concerns relating to this deal with respect to Barr’s Irn Bru and Orangina brands which could lead to higher prices for consumers.
“In addition, we could not rule out the possibility of further competition concerns arising from combining the overall Britvic portfolio of soft drinks with the entire Barr portfolio. We are therefore referring the merger to the Competition Commission for an in-depth investigation.”
The Competition Commission now has until 30 July to report its findings.
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