Britvic Shares Jump on Carlsberg Takeover Deal

Britvic has agreed a takeover bid of £3.3 billion from Danish brewer Carlsberg, which will allow the latter to expand its presence in the UK

Christopher Johnson 8 July, 2024 | 12:22PM
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Britvic Bottles UK Main

Shares in FTSE 250 soft drinks maker Britvic (BVIC) have jumped 4.8% on news it has agreed a £3.3 billion takeover deal by Carlsberg (CARLS B).

The Danish brewer has pursued an acquisition of the London-listed Britvic, the maker of brands such as J20 and R White’s lemonade, in a bid to expand its operations in the UK.

The deal will now create an enlarged group named Carlsberg Britvic.

Britvic accepted a £12.90 cash deal for each of its shares, which will also mean the drink maker's shareholders receive a special dividend of 25p per share.

Over the last five days, Britvic's share price is up 7.91% to £12.68, a sign that investors are responding positively to talk of a takeover.

This is the second bid Carlsberg has made after its first proposal valued the business at £3.1 billion. That was rejected after Britvic said the original offer undervalued the company.

Britvic also has an exclusive license with Pepsi Co (PEP) to produce and sell Pepsi Max, 7UP, Rockstar Energy and Lipton Iced Tea in Great Britain and Ireland.

Carlsberg chief executive Jacob Aarup-Andersen believes buying Britvic will take its relationship with PepsiCo "to the next level."

Yet some Carlsberg shareholders have called into question why the firm has decided to expand into the UK, when its business in Asia is showing such promise. Other opportunities also present themselves in Southern Europe.

Justifying the decision, however, Ararup-Andersen said "there are very few assets available out there. This was a unique opportunity." He did not rule out future acquisitions in the aforementioned regions.

The LSE Takes Another Hit 

Carlsberg is listed in Copenhagen, so this deal means Britvic will be the latest business to leave the London Stock Exchange.

In June, Hargreaves Lansdown announced it had accepted a bid from US private equity giant CVC Capital, Denmark's Nordic Capital, and a branch of the Abu Dhabi Investment Authority valuing the Bristol-based business at £5.4 billion. That deal will also mean Hargreaves will leave its FTSE 100 index.

In September last year, Cambridge-based chip designer Arm Holdings rejected London as a listing opportunity in favour of a place on the Nasdaq. It shares have since prospered.

Betting firm Flutter also ditched its primary London listing in favour of New York, while the cyber security giant Darktrace, which floated in London 2021, accepted a US private equity bid in April this year.

Britvic as a Business

Britvic was founded in Britain in 1938 and was previously known as the British Vitamin Products Company. It produced soft drinks that would give British consumers a cheap way to increase their vitamin intake.

The company's success led it to expand producing 39 drinks brands whilst exporting to 100 countries worldwide. In May the business announced strong revenue growth driven by demand in international markets. It also announced a £75 million share buyback scheme and reported an 11% increase in its revenue for the six months to the end of March 31 from £794 million to £880 million.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Britvic PLC1,262.00 GBX-0.08
Carlsberg A/S ADR25.17 USD-1.22Rating

About Author

Christopher Johnson  is data journalist at Morningstar

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