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London Essence Tonic Maker Britvic Joins Carlsberg Family In $4.2 Billion Takeover

 

Carlsberg, the world's third-largest beer producer, has announced its successful takeover bid for Britvic, the British soft drinks company best known for its premium mixer range London Essence Company. 

A "one-stop shop" for booze and soft drinks

The landmark deal is valued at £3.3 billion (US$4.2 billion) at 1,315 pence per share, and comes after the Danish brewer's earlier bid at 1,250 pence per share was rejected last month. Several earlier takeover offers from Carlsberg had in fact been rejected by Britvic's board on the basis that they undervalued Britvic.

Described by CEO of Carlsberg Jacob Aarup-Andersen as a "one-stop shop" for booze and soft drinks, this acquisition will create a stronger, more integrated beverage company with a diverse portfolio of alcoholic and non-alcoholic drinks, as well as a significant bottling and distribution network. The deal would increase Carlsberg's soft drinks business from 16% to 30% of total sales. A larger beer and soft drinks company named Carlsberg Britvic will be created in Britain.  

Britvic is described by Carlsberg as a leading soft drinks business in Great Britain, Western Europe and Brazil. The company's drinks portfolio includes soft drinks such as Robinsons, Tango, Fruit Shoot, J20, and perhaps most notably, London Essence Company which rocketed from obscurity in 2016, became the fastest-growing mixer company in Great Britain by 2022 and is now the third-largest mixer brand after significantly older brands such as Schwepps (founded 1783) and Fever-Tree (founded 2004).

The company also has a bottling partnership with PepsiCo in UK and Ireland.

 

 

"Britvic is an outstanding business with a strong heritage built on its portfolio of family-favourite brands, long-standing customer relationships, a well-invested supply chain infrastructure and a fantastic team of people across multiple markets," shared Ian Durant, a non-executive chairperson of Britvic.

Tapping into the RTD category

Acquiring Britvic is part of Carlsberg's larger strategy to strengthen its market position by tapping into the growing consumer demand for beverages outside the traditional beer category, such as cider, hard lemonade, hard seltzers and ready-to-drink cocktails. Carlsberg also intends to deepen its partnership with PepsiCo, which has existing bottling partnerships with both Carlsberg and Britvic.

 

(Source: Reuters)

 

"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 markets in Western Europe," said Aarup-Andersen.

Aarup-Andersen added: “There is significant value creation when we combine major beer businesses with major soft drinks businesses in core markets, and we have a proven business model around that.” He also points to Carlsberg's stronger sales in markets where it has combined beer and soft drinks businesses.

"Crucially, to remain competitive at a time when the market is being shaped by the trend of increasing consolidation among bottling partners, Carlsberg’s agreement with PepsiCo provides the combined group with a strong platform for continued success," said Durant.

Kanpai!

88 Bamboo Editorial Team