Carlsberg to buy Robinsons maker Britvic in £3.3bn deal

Carlsberg has agreed to buy soft-drinks maker Britvic for £3.3bn in a deal that would allow the Danish brewer to expand its drinks bottling activities for PepsiCo and grow its operations in the UK.

London-listed Britvic is PepsiCo’s bottler in Britain while Carlsberg bottles drinks for the US company in Norway, Sweden, Switzerland, Cambodia and Laos.

Carlsberg chief executive Jacob Aarup-Andersen said buying Britvic would take the brewer’s relationship with PepsiCo “to the next level”. It also hands to Carlsberg the soft-drinks brands owned by Britvic, including Robinsons and Fruit Shoot.

Under the terms of the deal, Carlsberg has agreed to pay 1,290p in cash for each Britvic share and pay Britvic shareholders a special dividend of 25p.

Shares in Britvic were up 5 per cent at 1,269p on Monday.

The companies reached agreement after Britvic last month rejected bids of 1,200p and 1,250p a share. The latest offer represents a premium of about 36 per cent to Britvic’s closing share price of 970p on June 19, the day before speculation over Carlsberg’s interest in the group started.

Carlsberg shareholders were initially unenthusiastic about a deal, sending shares in the brewer down almost 10 per cent.

Shares in Carlsberg, however, rose 4 per cent in Copenhagen on Monday, as the company sought to assure investors that the acquisition would bring attractive synergies and cost savings of £100mn over five years.

Aarup-Andersen said that as a result of the deal, the group would pause its share buyback programme, but that its dividend programme would remain unchanged. The buyback programme would resume when the company’s leverage returned to a 2.5 times net debt to earnings before interest, tax, depreciation and amortisation, Carlsberg said.

“You can’t have your cake and eat it,” he said, referring to the decision to pause buybacks. “This is about creating long-term shareholder value.”

Carlsberg shareholders had also questioned the merits of expanding in the UK when the brewer’s Asian business is growing fast and there might be southern European beer brands to buy.

“There are very few assets available out there. This was a unique opportunity,” said Aarup-Andersen, adding that the Britvic deal did not rule out doing acquisitions in those regions at a later date.

The deal would also offer Carlsberg a bigger platform in the UK, where it is the fourth-largest brewer.

Separately, Carlsberg agreed on Monday to acquire Marston’s minority stake in its brewing joint venture with the UK pub company for £206mn. The announcement lifted Marston’s shares as high as 20 per cent, as the move will allow the company to focus on paying down debt and simplifying the business.  

According to Britvic’s website, the company’s origins date back to the 1930s, when a chemist in Chelmsford, Essex, began producing soft drinks.

Additional reporting by Eri Sugiura