UK: Carlsberg Strikes Double Deal, Acquires Britvic and Remaining Shares in Marston’s

Carlsberg UK Holdings Limited, a subsidiary of Danish Carlsberg Group, has made a recommended cash offer to acquire the entire issued and to be issued ordinary share capital of Britvic, a soft drinks company based in Hemel Hempstead, England, Carlsberg confirmed today. This acquisition values Britvic at approximately GBP 3.3 billion (USD 4.24 bn), creating a new integrated beverage company, Carlsberg Britvic, in the UK.

Britvic, known for popular brands like Robinsons, J2O, and Fruit Shoot, and as the bottler for PepsiCo in Great Britain and Ireland, previously rejected two acquisition proposals from Carlsberg. The first offer on 6 June valued Britvic at GBP 2.99 billion (USD 3.79 billion), and the second offer on 11 June at GBP 3.10 billion (USD 3.93 billion). Britvic felt these offers undervalued the company's true worth and potential. (, 24.6.2024). Carlsberg then reconsidered and prepared a third offer, which led to the current agreement.

According to the agreement, Britvic Shareholders will receive 1,315 pence per share, including 1,290 pence in cash and a special dividend of 25 pence per share. The deal values Britvic at an implied enterprise value of GBP 4.1 billion, 13.6 times its adjusted EBITDA of GBP 303 million as of March 2024. Post-synergy, the EBITDA multiple drops to 10.2. The completion of the deal is expected in the first quarter of 2025, subject to shareholder and regulatory approvals.

Carlsberg aims to merge its business with Britvic to enhance growth in Western Europe, leveraging Britvic's strong portfolio, including partnerships with PepsiCo and ownership of leading brands such as Robinsons, Tango, and J2O. The acquisition is expected to boost Carlsberg’s top- and bottom-line growth, enhance cash flow, and strengthen its market position. Notably, PepsiCo has agreed to waive its change-of-control clause, facilitating the acquisition.

Carlsberg projects annual cost savings and efficiency improvements of GBP 100 million (USD 128.5m), fully realized within five years. The acquisition will be financed entirely through debt, raising Carlsberg's debt target to below 2.5x EBITDA, with expectations to meet this target by year three. Equally, Carlsberg announced today today that it will end its share buyback program.

In addition to the aforementioned deal, Carlsberg will acquire Marston’s PLC's 40% stake in Carlsberg Marston’s Limited (CMBC) for GBP 206 million. When both  companies merged in 2020, Carlsberg retained 60% ownership, while Marston’s, formerly a leading pub operator in the UK, held the remaining 40% in the joint company (, 22.5.2020) This move facilitates the integration of Britvic and CMBC, with the transaction expected to close in Q3 2024.

Jacob Aarup-Andersen, CEO of Carlsberg Group, commented, “This transaction combines Britvic’s high-quality soft drinks with Carlsberg's strong beer portfolio, enhancing our market proposition. The deal is immediately earnings accretive and value-accretive in year three. We look forward to integrating Britvic’s employees into the Carlsberg family and creating a leading multi-beverage supplier in the UK.”

Silviu Popovici, CEO of PepsiCo Europe, added, “We anticipate stronger sales and distribution capabilities for our brands with this combination. We look forward to continuing our successful partnerships and expanding into further markets.”

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