The merger faces uncertainty over competition concerns

The merger faces uncertainty over competition concerns

The merger of AG Barr and Britvic has suffered a serious setback after the UK's Office of Fair Trading (OFT) referred the deal to the Competition Commission.

In an announcement today (13 February) the OFT said that it was making the referral due to "concerns that it could reduce competition between certain brands" of the two companies. Amelia Fletcher, the OFT's chief economist said: "Our investigation has identified competition concerns relating to this deal with respect to Barr's Irn Bru and Orangina brands which could lead to higher prices for consumers."

As a result of the referral the deal, agreed last November, has technically collapsed. However, just-drinks understands that both groups are waiting for full details of the OFT's decision before deciding whether to revive the deal. It is understood the companies would have to hold another shareholder vote on the issue.

An AG Barr spokesperson told just-drinks: "The belief still is the merger will not result in competition problems."

In a joint statement, the companies said they will "continue to work together".

Meanwhile, Britvic announced today that is has appointed Simon Litherland as its new CEO with immediate effect. Outgoing CEO Paul Moody is retiring from the group but will stay on for six months to "ensure a smooth handover", the company said. 

To read an exclusive analyst's take on the decision, click here.

To see just-drinks' full coverage of AG Barr and Britvic's proposed merger, click here.