Carlsberg to Acquire Britvic for £3.3 Billion, Creating UK Beverage Powerhouse

Danish brewer Carlsberg (CARLb.CO) has agreed to acquire British soft drinks maker Britvic for £3.3 billion ($4.23 billion). The acquisition, aimed at creating a formidable UK beverage powerhouse, has driven both companies’ shares higher.

According to Reuters, Carlsberg secured the deal with a sweetened offer of 1,315 pence per share, including a special dividend of 25 pence per share, after Britvic had rejected an earlier bid of 1,250 pence per share last month. Carlsberg CEO Jacob Aarup-Andersen expressed confidence in the deal, highlighting its potential to create significant shareholder value and drive growth.

“With this transaction, we are creating a UK powerhouse,” Aarup-Andersen told investors during a conference call. He addressed concerns about integration risks by emphasizing Carlsberg’s proven ability to manage both beer and soft drink businesses across various markets. Currently, soft drinks constitute 16% of Carlsberg’s total volumes, according to Reuters.

Following the announcement, Carlsberg’s shares surged nearly 4% in morning trading, eventually settling 3.1% higher by 09:50 GMT. Britvic’s shares rose nearly 5%, while Marston’s saw a 15% jump, though both stocks later pared their gains.

Strategic Expansion and Cost Savings

This acquisition is part of a broader strategy by brewers to diversify their product portfolios as consumer preferences shift away from beer towards spirits, canned cocktails, hard seltzers, and zero-alcohol brews. Britvic’s extensive range of non-alcoholic drinks, sold in the UK, Ireland, Brazil, and other international markets including France, the Middle East, and Asia, complements Carlsberg’s offerings.

Carlsberg expects the deal to yield significant benefits, including cost and efficiency savings of £100 million ($128 million) over five years by leveraging common procurement, production, and distribution networks. Additionally, Carlsberg will take over Britvic’s bottling agreement with PepsiCo (PEP.O), expanding its existing bottling operations with potential for further geographical growth.

Source: Reuters