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Soft drinks merger of AG Barr and Britvic gets green light Soft drinks merger of AG Barr and Britvic gets green light
(4 months later)
The long-awaited merger of Iru-Bru maker AG Barr and Robinsons fruit drinks firm Britvic has been approved by the Competition Commission, leading the way for the creation of one of the biggest drinks companies in Europe.The long-awaited merger of Iru-Bru maker AG Barr and Robinsons fruit drinks firm Britvic has been approved by the Competition Commission, leading the way for the creation of one of the biggest drinks companies in Europe.
However, Britvic said renegotiations between the two sides were needed because the original deal did not reflect cost savings and improvements made by the new management.However, Britvic said renegotiations between the two sides were needed because the original deal did not reflect cost savings and improvements made by the new management.
The commission said wholesale prices of the two brands' products, which also include Tango, Orangina and Lipton Iced Tea, would not increase significantly from any merger. It added that inquiries "told us that most consumers tend to see Barr and Britvic brands as distinct products, rather than close substitutes for each other".The commission said wholesale prices of the two brands' products, which also include Tango, Orangina and Lipton Iced Tea, would not increase significantly from any merger. It added that inquiries "told us that most consumers tend to see Barr and Britvic brands as distinct products, rather than close substitutes for each other".
Britvic's chairman, Gerald Corbett, said: "Our company is in a different place to last summer when the terms of the merger were agreed. The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK.Britvic's chairman, Gerald Corbett, said: "Our company is in a different place to last summer when the terms of the merger were agreed. The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK.
"These are among the issues the board will reflect on in August once the Competition Commission's conclusions are known in order to ensure that it acts in the best interests of Britvic's shareholders.""These are among the issues the board will reflect on in August once the Competition Commission's conclusions are known in order to ensure that it acts in the best interests of Britvic's shareholders."
The company plans to cut 400 jobs at factories in Chelmsford and Hudderfield and close a warehouse in Belfast as it tries to save £30m.The company plans to cut 400 jobs at factories in Chelmsford and Hudderfield and close a warehouse in Belfast as it tries to save £30m.
AG Barr welcomed the decision and said it awaited the full report next month.AG Barr welcomed the decision and said it awaited the full report next month.
The original £1.3bn deal, discussed in September, would have led to Britvic shareholders gaining a 63% share in the merged company, leaving the remaining to AG Barr investors. However, the deal lapsed in November after it was referred to the Competition Commission.The original £1.3bn deal, discussed in September, would have led to Britvic shareholders gaining a 63% share in the merged company, leaving the remaining to AG Barr investors. However, the deal lapsed in November after it was referred to the Competition Commission.
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