UK: AG Barr, Britvic merger delayed but still on - analyst
The merger was expected to take place this month
Wayne Brown, analyst at Canaccord Genuity, today (14 February) called the Office of Fair Trading's (OFT) decision to refer the deal to the Competition Commission “rather bewildering” but said that both companies should continue to work towards their goal. “We remain confident that this referral represents a delay to the merger and remain confident of a positive resolution,” Brown said.
The note was released just ahead of the companies confirming they will fight their case with the Competition Commission.
Yesterday, the OFT said the referral was due to concerns it could reduce competition between Britvic's Pepsi and Tango brands and Barr’s Irn Bru and Orangina brands.
Brown said competition concerns could be dealt with through the termination of licensing Orangina in the UK, and the sale of smaller non-core brands. He also noted that Orangina only accounts for about GBP5m (US$7.7m) to GBP10m in sales for Britvic: “Hardly a competitive stumbling block in a soft drinks market worth GBP9bn.”
Shareholders from both companies has previously approved the merger last month and it had been expected to complete by the end of February.
Although AG Barr was on its way to the church earlier this month, Britvic was still having second thoughts. The end of the affair leads Richard Corbett to ponder what went wrong for the two and what h...
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
The company is focused on following three main strategies in 2013 in order to maintain its presence as one of the leading soft drinks manufacturers in the UK. These are innovation, increased distribut...
Barr (AG) Plc is focused on joining forces with Britvic Soft Drinks Ltd to become a joint partner company in what is expected to be the largest European soft drinks company. The formulation of the mer...
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