UK’s largest soft drinks manufacturer AG Barr and Britain’s number two soft drinks producer Britvic are negotiating a £1.4 billion merger deal which aims to create Europe’s largest soft drinks company, to bring about Robinson squashes and Irn-Bru brands together.
Under the deal, Britvic would own 63% of the merged group’s equity and AG Barr shareholders 37%. The new entity will be run by Roger White, AG Barr’s chief executive. Britvic’s chairman Gerald Corbett will retain his role even with the new entity.
“Discussions are at an early stage and, whilst there can be no certainty at this stage that such discussions will conclude successfully, agreement has been reached with respect to certain key aspects of the merger”, Britvic said in a statement.
AG Barr and Britvic underwent turbulent times due to poor weather conditions this summer, with Barr issuing warning at the end of July that profits would be below the previous year’s level.
Britvic is also in a sensitive position following a £25 million drop in profits, due to its brand Fruit Shoots being recalled after a design fault emerged in the caps.
After the negotiation news got round, Britvic’s shares soared 28.4p to 357p while Barr saw 7.9p rise at 423.5p. With the current share prices Britvic is worth £863 million, Barr at £494 million and the combined group at nearly £1.4 billion.
Britvic’s brands include J2O, Fruit Shoot, Tango, drench and Robinsons, while AG Barr is famous for producing Scottish favourite Irn Bru apart from its other brands Tizer, Ka and Rubicon.