Will Carlsberg make another bid to acquire Britvic?

Britvic’s brands include big British names such as Robinsons, Tango and J2O; but the company has also diversified into areas such as plant-based milk (with Plenish) and iced coffee (acquiring Jimmy’s Iced Coffee in 2023). It also has an exclusive licence with PepsiCo to make and sell brands such as Pepsi MAX, 7UP, Rockstar Energy and Lipton Ice Tea.

On 6 June, Britvic received an offer of 1,200 pence per Britvic share from Danish brewing giant Carlsberg, valuing the company at £2.99bn ($3.79bn). This was rejected by Britvic’s Board.

On 11 June, Britvic received a second proposal at a price of 1,250 pence per Britvic share, upping the value to £3.1bn ($3.93bn). This was also rejected by the Board.

In a statement on Friday (June 21), Britvic’s board said both offers ‘significantly undervalue’ the company but added it will ‘consider any further proposal on its merits’. Carlsberg, in a statement the same day, said it is considering its position.

This morning, Carlsberg announced it had reached an agreement with PepsiCo, whereby PepsiCo has agreed to waive the change of control clause in the bottling arrangements it has with Britvic. That waiver has been put in place to come into effect should Carlsberg acquire Britvic, smoothing the way for an acquisition.

The Times reports Carlsberg is putting a third bid together​; although Carlsberg’s statement this morning emphasizes that ‘there can be no certainty any offer will be made’.

Under the UK’s takeover rules, Carlsberg now has until July 19 to make an offer for Britvic.

Growth potentialWhile centered in the UK, Britvic sells drinks in 100 countries (with Brazil, France and Ireland representing some of its key international markets) and produces 39 brands. Founded in England in the 1930s, it champions its heritage and vision with key British brands.

In 2023, it posted revenue of £1.75bn, a 6.6% year-on-year increase on the prior year.

Over the last year it has been investing in its supply chain, adding capacity and upgrading technology, while building up its portfolio with acquisitions such as Jimmy’s Iced Coffee in Great Britain​, and soft drinks, energy drinks and smoothies in Brazil.​

While best-known as a brewing giant, Carlsberg also has a growing portfolio in alcohol-free and beyond beer – areas identified as priority areas for future growth – and soft drinks (such as Carlsberg Sport and Battery Mix energy drink in some markets).

“Carlsberg believes that the potential transaction [potential acquisition of Britvic] would enable it to capture appealing long-term growth opportunities from Britvic’s comprehensive portfolio of leading brands in an attractive segment of the beverage market where Carlsberg already has a strong track record,” says a statement from Carlsberg.

“The potential transaction is fully aligned with Carlsberg’s ambitious growth agenda as set out in its Accelerate SAIL strategy​ announced in February 2024.”