Kingmaker Pepsi gives blessing to Carlsberg’s swoop for UK bottler Britvic
Pepsi has reportedly given its blessing to Carlsberg’s attempted takeover of Britvic, the American giant’s UK bottler, bolstering the possibility of a raised offer from the Danish beer firm.
Executives at Pepsi are understood to have told Carlsberg that it would not exercise a change-of-control clause that would allow it to unilaterally terminate its lucrative bottling agreement with Britvic and make the latter a less attractive asset to Carlsberg, according to The Sunday Times.
Pepsi is understood to be amenable to Carlsberg taking over Britvic because the Danish giant already bottles soft drinks on its behalf in other regions.
Pepsi and Carlsberg declined to comment.
Britvic’s long-standing deal with Pepsi gives it exclusive distribution and sales rights for brands including 7Up, Pepsi Max and Lipton Iced Tea until 2040.
Carlsberg disclosed last week that it had made two takeover bids for FTSE 250-listed Britvic, which also owns the Robinsons squash brand, this month. Both approaches were rejected by Britvic, which said its latest £12.50 per share offer “significantly undervalues” its prospects.
However, Britvic’s board said it would “consider any future proposal on its merits”. An improved third offer at a price closer to £14 per share could come as early as this week, it was reported.
Under UK takeover rules, Carlsberg has until 5pm on 19 July to either make a formal offer for Britvic or walk away.
Carlsberg’s swoop for Britvic comes as part of its “beyond beer” strategy, launched in 2022. The plan involves expanding into markets like soft drinks, cider and alcohol-free beer.
If Carlsberg were to succeed in merging with Britvic, the combined business would generate an estimated 25 per cent of its sales from the UK.
Irn Bru maker AG Barr previously agreed a £1.5bn merger with Britvic in 2012, although it was abandoned the following July after the two companies failed to agree on terms.