Drinks growth

Carlsberg builds in UK after Britvic and Marston’s deals

Britvic’s brands include Lipton iced tea

Danish brewer Carlsberg has agreed a £3.3 billion acquisition of UK soft drinks company Britvic and has acquired the minority stake in a joint venture with Marston’s (CMBC).

The two deals will substantially increase Carlsberg’s presence in the UK drinks sector. It said it intends to create a single integrated beverage company in the UK, to be named Carlsberg Britvic.

It will be led by a management team of individuals from each of Carlsberg, CMBC and Britvic.

Britvic’s brands include Robisons and it has an exclusive licence with PepsiCo to make and sell Pepsi MAX, 7UP, Rockstar Energy and Lipton Ice Tea.

By buying Britvic, Carlsberg is responding to a shift towards people drinking less alcohol. Half of the UK adult population bought a no-alcohol or low-alcohol product during 2022, according to IWSR, a drinks industry specialist. 

Carlsberg chief executive Jacob Aarup-Andersen, said: “With this transaction, we are combining Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and route-to-market capabilities, creating an enhanced proposition across the UK and markets in western Europe.

“We are confident that Carlsberg Britvic will become the preferred multi-beverage supplier to customers in the UK with a comprehensive portfolio of market-leading brands.”

The deal has an implied enterprise value of approximately £4.1bn and Britvic shareholders will receive 1315p for each Britvic Share which includes  a special dividend payment of 25p.

It represents a premium of approximately 36% to the closing porice per Britvic Share of 970p on 19 June, the day prior to speculation around a possible offer.

The implied enterprise value multiple is approximately 13.6 times Britvic’s reported adjusted EBITDA of £303 million for the 12 month period ended 31 March 2024.

Bernstein analysts who cover Carlsberg’s stock described the takeover as “a solid deal at a sensible price”, but added that the sum offered had been lower than they had expected.

The separate deal for CMBC brings together a portfolio of beer brands alongside a distribution and logistics network.

Marston’s confirmed it will receive £206 million to sell Carlsberg its 40% stake in the venture.

Marston’s will remain a partner for the new enlarged business, and the long-term drinks supply and distribution agreement between Marston’s and CMBC will remain in place on substantially the same terms to ensure availability of CMBC’s brands across Marston’s pub estate.

The CMBC transaction is expected to close in the third quarter of 2024.



Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.