PepsiCo Clears Path for Carlsberg's Potential Britvic Acquisition
Carlsberg Group's pursuit of Britvic plc has gained new momentum as PepsiCo has agreed to waive a crucial change-of-control clause. This development removes a significant barrier to the Danish brewer's potential takeover of the British soft drinks company.
Carlsberg's acquisition of Britvic, known for bottling and distributing PepsiCo brands in the UK and Ireland, could be back on track. Britvic recently rejected two takeover bids from Carlsberg, the latest valuing the company at £3.2 billion, or 1,250 pence per share—a 7.6% premium on Britvic's share price as of 21st June. Despite these rejections, Carlsberg has not abandoned its acquisition ambitions.
In a statement issued on 24th June, Carlsberg confirmed that PepsiCo had agreed to waive the change-of-control clause in its bottling contracts with Britvic. This clause previously allowed PepsiCo to terminate its bottling agreement with Britvic if the company were acquired, making Britvic a less attractive acquisition target. “This waiver will come into effect should an acquisition of Britvic by Carlsberg, which has the recommendation of Britvic’s board, proceed to completion”, a Carlsberg spokesman said.
Britvic, which bottles PepsiCo drinks under license in the UK, also owns popular brands such as Robinsons, R. White’s, and J2O. Carlsberg's spokesman also noted that "Carlsberg is considering its position. There can be no certainty that any offer will be made. A further announcement will be made as appropriate." Britvic's board remains confident in the company's future prospects, affirming that any new proposals will be assessed on their merits.
PepsiCo's agreement to waive the change-of-control clause potentially smooths the path for Carlsberg, which has until 19th July to make a formal offer or walk away. Analysts suggest that this takeover could unlock significant synergies for Carlsberg, particularly in the UK market, where it remains subscale. Additionally, it would help diversify Carlsberg's portfolio beyond beer into other beverage categories like cider, hard seltzers, and ready-to-drink cocktails.
Despite Britvic’s initial rejections, Carlsberg is reportedly considering a third bid. The ongoing speculation and takeover attempts have positively impacted Britvic's stock, which has surged by around 40% since the start of the year. Carlsberg's interest in Britvic aligns with its strategy to expand beyond traditional beer offerings, responding to shifting consumer preferences towards spirits and non-alcoholic beverages. With PepsiCo's bottling clause waived, Carlsberg's potential acquisition of Britvic could significantly shift the beverage industry landscape.
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