Britvic agrees all-share merger with AG Barr

Listed UK soft drinks group Britvic, which owns the Ballygowan water and Club brands in Ireland, has agreed an all-share merger with Scotland’s AG Barr, the maker of IRN-BRU.

It has been proposed that the transaction will be implemented via a scheme of arrangement of Britvic, which will be the majority shareholder in the new entity. Subject to shareholder approval and regulatory clearance, the combined entity is set to be called Barr Britvic Soft Drinks plc.

Britvic gained a major foothold in Ireland in 2007 when it acquired the soft drinks division of CC for €249 million.

This deal, which has been under discussion for more than two months, would create one of the biggest soft drinks companies in Europe, with annual sales of more than £1.5 billion.

Britvic shareholders will hold about 63 per cent of the new company and AG Barr investors will have the balance.

In a joint statement yesterday, the companies said the combination had “compelling commercial and industrial logic” and should give rise to “ significant cost and net revenue synergies”.

The boards estimate that the merger will provide an opportunity to achieve a contribution of at least £5 million from annual net revenue synergies.

The new entity is to be led by AG Barr chief executive Roger White with John Gibney, the current chief financial officer of Britvic, assuming that role with the combined group.

Britvic and AG Barr: Main Brands

BRITVIC

Britain Robinsons, J2O Fruit Shoot, Tango and Drench.

Ireland MiWadi, Club and Ballygowan.

France Teisseire, Fruité and Pressade.

Also, exclusive bottling agreement with PepsiCo in Britain and Ireland.

AG BARR

IRN-BRU, Tizer, D’N’B, KA, Barr flavour range, Barr’s Originals, Red Kola, Strathmore Spring Water and St Clements juice drinks.

Also, franchise partner of Schweppes in Britain, where it manufactures Orangina under licence and has rights to sell Rockstar in Britain and Ireland.