Ballygowan-owner Britvic rejects Carlsberg takeover offer

Carlsberg and Britvic share some business partners and customers in bottling, canning and distribution.

Ballygowan-owner Britvic has rejected a takeover bid from Danish drinks giant Carlsberg which valued the UK soft-drink maker at as much as £3.1bn(€3.66bn).

The Britvic board turned down a proposal from the brewer earlier this week.

Carlsberg said in a separate statement that its interest in Britvic is aligned with its strategy announced in February, which includes expanding its portfolio beyond beer. Brands such as Somersby ciders and Garage hard seltzers account for just 2% of its volumes.

“Big Beer” has been grappling with a long-term decline in demand, as drinkers switch to spirits or cut down on alcohol consumption. Carlsberg is also looking for new sources of growth after Russia seized its assets in that country following its invasion of Ukraine.

Britvic is the UK bottler for Pepsi, a relationship that Carlsberg already has in markets including Norway, Switzerland, Sweden and Cambodia. Carlsberg and Britvic also share some business partners and customers in bottling, canning and distribution, creating some degree of overlap.

The Danish brewer said its latest proposal was worth 29% more than Britvic’s closing price on Wednesday, before speculation about possible bids emerged. The deal would expand Carlsberg’s footprint in the UK, where it is the fourth-largest brewer and has a joint brewing venture with Marston’s Plc.

'Highly opportunistic'

Goodbody analysts said the offer looked “highly opportunistic” given Britvic’s recent performance and suggested other potential bidders could include Heineken or Budweiser-maker AB InBev, who’ve been looking to expand beyond beer.

Britvic said the offer significantly undervalued the company and its prospects. In its latest results, for the six months to March 31, Britvic reported a 4.4% increase in sales volumes, along with adjusted earnings before interest and taxes up 17.7%, partly due to strong sales of Pepsi MAX and its Fruit Shoot drink.

Britvic shares surged 14% early on Friday in London while Carlsberg traded 5% lower in Copenhagen.

Bloomberg