Analysis - Britvic, AG Barr merger chances fade after shake-up
Britvic's proposed merger with Barr was halted in February
Nomura's Ian Shackleton said he now gave the deal no more than 10% chance because “Britvic appears to be capturing some of the perceived benefits by itself”. In February, after the Barr deal was referred to the UK's Competition Commission, Shackleton said the merger had a 30% chance of completing.
Britvic announced today it plans to close two factories and one warehouse in the UK as part of a strategy to save GBP30m a year by 2016.
Meanwhile, UBS analysts said the cost savings plan is a “positive” and shows new chief executive Simon Litherland “has hit the ground running”. However: “It could mean that a possible merger with AG Barr is less likely.”
Wayne Brown, analyst at Canaccord Genuity, took a different view, noting that the closures would likely have been part of a post-merger re-organisation.
“It is therefore difficult not to question the timing of this announcement and if many of the initiatives announced today are a direct result from the proposed merger with AG Barr and form part of the strategic view that the AG Barr management team had,” Brown said.
Brown also branded Britvic's H1 profits surge today as “unsustainable” and questioned whether the group raised prices and decreased advertising spend to achieve strong numbers ahead of the Competition Commission's decision on the Barr merger in July.
To see just-drinks' full coverage of AG Barr and Britvic's proposed merger, click here.
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...
Following the acquisition of Irish company C&C (Ireland) Ltd in 2007 Britvic Ireland Ltd has held a firm position in soft drinks, offering leading brands such as Club and Ballygowan in Ireland. Despit...
- just The Preview - Diageo's FY preliminaries
- Analysis - SABMiller's Australian issues continue
- Focus - SABMiller's Q1 Performance by Region
- PepsiCo find stability but Peltz concerns linger
- PepsiCo to consider more re-franchising - CEO
- Diageo silent over Shuijingfang writedown report
- Diageo's Captain Morgan Facebook ad banned
- Sales, profits fall at Moet Hennessy in H1
- Champagne Nicolas Feuillatte appoints new CEO
- Molson Coors CEO to retire