Carlsberg and Britvic seal major acquisition deal to boost beverage portfolio

In a significant expansion of its beverage portfolio, Carlsberg Group, through its wholly-owned subsidiary Carlsberg UK Holdings Limited, has agreed to acquire Britvic PLC in a deal valued at approximately GBP 3.3 billion. This acquisition, termed the “Britvic Acquisition,” not only emphasizes Carlsberg’s strategic push into the soft drinks market but also aligns with its Accelerate SAIL growth strategy.

Britvic, a leading player in the international soft drinks industry, is known for its partnership with PepsiCo in the UK and Ireland, holding exclusive rights to manufacture, bottle, and sell notable brands like Pepsi, 7UP, and Lipton Ice Tea. Additionally, Britvic owns several popular brands including Robinsons, Tango, Fruit Shoot, J2O, and Aqua Libra, making it the largest supplier of branded still soft drinks and the second-largest supplier of branded carbonated soft drinks in Great Britain.

The acquisition proposal includes a cash offer of 1,290 pence per Britvic share plus a special dividend of 25 pence per share, expected to be paid prior to the completion of the acquisition. This offer represents an enterprise value multiple of approximately 13.6 times Britvic’s adjusted EBITDA for the 12 months ended March 31, 2024.

The transaction is set to be executed through a scheme of arrangement under Part 26 of the UK Companies Act 2006, with Britvic’s board unanimously recommending shareholders vote in favor. Subject to shareholder and regulatory approvals, the acquisition is expected to be finalized in the first quarter of 2025.

Carlsberg envisions the creation of a single integrated beverage company, to be named Carlsberg Britvic, enhancing its footprint in Western Europe. This strategic move is expected to significantly increase Carlsberg’s cash flow in the region and provide a more diverse portfolio encompassing both beer and soft drinks.

Jacob Aarup-Andersen, CEO of Carlsberg Group, expressed enthusiasm about the merger, stating, “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 acquisition of Britvic by Carlsberg is a pivotal move that will likely reshape the competitive landscape of the beverage industry in Europe. By merging Britvic’s extensive soft drink offerings with Carlsberg’s robust beer portfolio, the combined entity is poised to leverage synergies that enhance brand development and market penetration.