Manufacturing & Supply Chain

The boards of the Carlsberg Group and Britvic PLC have reached agreement on the terms of a recommended cash offer to be made by Carlsberg UK Holdings Limited, a wholly-owned subsidiary of Carlsberg, to acquire the entire issued and to be issued ordinary share capital of Britvic. Britvic is a leading international soft drinks business. Britvic is the main partner for PepsiCo in the UK and Ireland with exclusive rights to manufacture, bottle, and sell brands including Pepsi, 7UP, and Lipton Ice Tea. Britvic also owns a number of brands including Robinsons, Tango, Fruit Shoot, J2O and Aqua Libra.

Britvic is the largest supplier of branded still soft drinks and the number two supplier of branded carbonated soft drinks in Great Britain. Britvic is also an industry leader in Ireland with brands such as MiWadi and Ballygowan; in France with brands such as Teisseire, Pressade and Moulin de Valdonne; and in Brazil with brands such as Maguary, Bela Ischia, Extra Power and Dafruta.

The Britvic Acquisition values the entire issued and to be issued ordinary share capital of Britvic at approximately £3.3 billion on a fully diluted basis and an implied enterprise value of approximately £4.1 billion. Carlsberg intends to create a single integrated beverage company in the United Kingdom, to be named Carlsberg Britvic. The enlarged business will have a portfolio of leading brands across the beer and soft drinks categories.

The Britvic Acquisition will enhance Carlsberg’s top- and bottom-line growth profile in Western Europe and significantly increase the level of cash flow generated in the region. The Britvic Acquisition will be transformative for Carlsberg’s UK business creating considerable opportunity for the future development of brands and people of both organisations, and will create a highly attractive multi-beverage supplier of scale, benefitting from an efficient supply chain and distribution network, and providing customers with a comprehensive portfolio of market leading brands and leading customer service.

The Britvic Acquisition will also further strengthen Carlsberg’s close relationship with PepsiCo, which currently spans five markets across Western Europe and Asia. PepsiCo has agreed to waive the change of control clause in the bottling arrangements it has with Britvic. This waiver will come into effect should an acquisition of Britvic by Carlsberg, which has the recommendation of Britvic’s board, proceed to completion, Carlsberg has agreed certain future long term bottling arrangement terms for Britvic that would come into force following the Britvic Acquisition.

Carlsberg has identified annual cost savings and efficiency improvements in the region of £100 million, which Carlsberg expects to be delivered over the 5 years following the acquisition of Britvic. Carlsberg expects £80 million will be fully realised by the end of year 3, with a further £20 million expected to be realised by year 5.

Separately the boards of Carlsberg and Marston’s plc have reached agreement on the acquisition of Marston’s 40% stake in Carlsberg Marston’s Limited (CMBC) for £206 million. The 100% ownership of CMBC will facilitate full integration of Britvic and CMBC. The CMBC Transaction is anticipated to close in the third quarter of 2024.

Carlsberg Group CEO Jacob Aarup-Andersen (pictured) says: “With this transaction, we are combining Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and other markets in Western Europe. The proposed transaction is attractive for shareholders of Carlsberg, supporting our growth ambitions, being immediately earnings accretive and value-accretive in year three. We are excited about expanding our global partnership with PepsiCo and believe that the longer-term opportunities will be very beneficial for both companies.

“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 multibeverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands.”

CEO of PepsiCo Europe Silviu Popovici says: “We are looking forward to building on our long-standing and successful partnerships with both Carlsberg and Britvic. 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.”