Britvic chills AG Barr merger talk
As the Hertfordshire-based drink firm received formal notification that its now lapsed tie-up with AG Barr has been given competition clearance, Britvic indicated it was under no pressure to resurrect a deal.
%VIRTUAL-SkimlinksPromo%Chairman Gerald Corbett said a new chief executive in Simon Litherland and the prospect of £30 million of cost savings over the next three years meant the merger benefits are "materially less than they were".
He said: "We would obviously consider any proposal tabled in the interests of shareholders. However, Britvic is in a very different position to last summer when the merger was agreed."
Tizer and Rubicon maker AG Barr said it will actively reconsider a potential merger and that apart from Britvic's recently announced short-term cost savings plan little has changed to alter the merger rationale.
The planned £1.4 billion tie-up lapsed in February because of delays caused by the Office of Fair Trading's decision to refer the matter to the Competition Commission.
In its final report, the Commission said the brands owned by Britvic and AG Barr were not close competitors and consumers would not lose out.
Irn-Bru is the largest Barr brand and has a particularly strong presence in Scotland, while other Britvic labels include J2O, Fruit Shoot and Tango.
Retail sales of soft drinks in the UK amounted to £11.2 billion last year.
Mr Corbett, who was fiercely critical of the OFT's decision to refer the merger, said: "The board is confident of driving £30 million of cost savings over the next three years and of the enhanced international expansion opportunities. In addition, performance has improved, the merger benefits are materially less than they were and our share price is almost twice the level it was. Britvic's prospects as a stand-alone company are bright."