Carlsberg, the global brewing giant, has announced a significant step in its expansion strategy by acquiring Britvic PLC, a leading international soft drinks company, in a deal valued at approximately £3.3 billion on a fully diluted basis, with an implied enterprise value of approximately £4.1 billion. The acquisition is set to be executed through a scheme of arrangement.
Under the terms of the acquisition, Britvic shareholders will receive 1,315 pence per share, comprising 1,290 pence in cash and a special dividend payment of 25 pence per share. The offer represents a premium of approximately 36% to Britvic’s closing price of 970 pence on 19 June 2024, the day before speculation about a potential offer began. Additionally, the acquisition reflects an implied enterprise value multiple of 13.6 times Britvic’s adjusted EBITDA of £303 million for the twelve months ending 31 March 2024.
Strategic Importance for Carlsberg
This acquisition is of strategic importance for Carlsberg, as it aligns with the company’s ambitions to bolster its presence in Western Europe and expand its footprint in the global beverages market. Britvic, recognized as a leading soft drinks business in Great Britain, Western Europe, and Brazil, complements Carlsberg’s successful bottling operations in the Nordic region. The acquisition is expected to enhance Carlsberg’s portfolio, particularly in the soft drinks sector, which currently accounts for approximately 16% of Carlsberg’s total group volumes and 27% of volumes in Western Europe.
Following the acquisition, Carlsberg intends to create an integrated beverage company in the UK, to be named Carlsberg Britvic. The combined entity will leverage the synergies between beer and soft drinks, enhancing efficiency in procurement, production, warehousing, and distribution. Additionally, Carlsberg anticipates that this move will further solidify its longstanding partnership with PepsiCo, with whom Britvic has established bottling arrangements.
Expansion and Integration Plans
In addition to the acquisition of Britvic, Carlsberg has also agreed to acquire Marston’s PLC’s minority stake in Carlsberg Marston’s Limited (CMBC), conditional on shareholder approval. This acquisition will make Carlsberg the sole owner of CMBC, which boasts a strong portfolio of beer brands and an extensive distribution network. Marston’s will remain a key partner for the new, enlarged business, maintaining the existing Drinks Supply and Distribution Agreement to ensure continued availability of CMBC’s brands across Marston’s pub estate.
Carlsberg’s broader strategy includes the phased integration of Britvic into its existing operations, with plans to establish a management team comprising individuals from Carlsberg, CMBC, and Britvic. The company expects the combined group’s synergies to unlock substantial value, driving growth across both beer and soft drinks categories.
Advisory and Legal Representation
Leading global law firm Baker McKenzie is advising Carlsberg on this acquisition. The legal team, led by London Corporate Partner Nick Bryans, includes experts across various practice areas such as Corporate, Banking & Finance, Commercial, Employment & Benefits, Pensions, and Intellectual Property.
On the other side of the deal, Linklaters is advising Britvic on the takeover. The Linklaters team is led by corporate partners Iain Fenn and Jonathan Sadler, with support from managing associate Meila Burgess and Alexandra Beidas, the Global Head of Employment & Incentives.
The transaction represents a significant opportunity for Carlsberg and is expected to close in the third quarter of 2024, following the necessary approvals and completion of related transactions.
This acquisition underscores Carlsberg’s commitment to expanding its market presence and enhancing its product offerings, positioning itself as a leading integrated beverage company in the UK and Western Europe.
Contact us at hello@lawgacy.com to feature your articles, columns, firm’s deals or press releases.
