The proposed merger could yet still happen

The proposed merger could yet still happen

AG Barr and Britvic's proposed merger remains alive after the companies said they believe they can satisfy regulators' competition concerns arising from the deal.

The GBP1.5bn (US$2.4bn) merger, first announced in November, hit a stumbling block yesterday (13 February) when the UK's Office of Fair Trading said it had referred the deal to the Competition Commission. The OFT said that it has competition concerns over some brands, which could mean higher prices for consumers.

But, in a joint statement today (14 February), the companies argued that the deal "will not result in a substantial lessening of competition" and they will be able to prove that to the Competition Commission.

The groups said they want to work with the commission with "a view to seeking clearance of the proposed merger".

"A.G. Barr and Britvic consider there to be compelling rationale for clearance," the companies said.

The Competition Commission's investigation is expected to take around six months.

Barr and Britvic's board will have to reconsider the deal if it receives clearance.

However, the statement added: "There can be no certainty or assurance that, following such clearance, any such merger would be forthcoming or that any offer will be made by either A.G. Barr or Britvic." 

To read an analyst's take on the situation, click here