Fri, 15 Feb 2013 | MERGER
Drinks giants Britvic and AG Barr have promised that a merger between the two companies would not harm consumers.
The businesses were due to enter into a £2 billion merger deal this month, but progress was halted when the Office of Fair Trading (OFT) took a surprise decision to refer things through to the Competition Commission.
Fears of an increase in prices on some brands were behind the decision to refer the merger. It added that many people viewed Barr's Irn Bru and Orangina brands as alternatives to Britvic's Pepsi and Tango, so bringing the two together could reduce competition in pricing. But a joint statement from the two groups insisted that the deal “would not result in a substantial lessening of competition”.
Gerald Corbett, chairman of Britvic, said that he was “bemused” by the decision to refer the deal to the regulator, especially given that even once combined the two companies would only have a 14 per cent share of the soft drinks market, half that of Coca-Cola Enterprises.
Britvic may be particularly disappointed in the delay as the firm has seen a number of profits warnings flagged up in the past three years. A merger with Barr would help give it a more positive outlook for a sustainable future, even if there would need to be some significant restructuring to get an agreeable deal in place.
The OFT will publish confirmation of the ruling next week along with further details about the referral but it looks likely that a six-month investigation by the Competition Commission will go ahead. If the companies receive clearance at the end of this investigation they confirmed that they would “each reconsider, at that time, the terms of a possible merger”.
___________________________________________________________________________
Related News:
Britvic buys C&C soft drinks and distribution business for £169.5m
For sale is a long-established tree surgery and arboricultural services business with an excellent reputation, serving both domestic and commercial sectors across Southern England, including the Home Counties and London.
An opportunity has arisen to acquire a mechanical engineering company specialising in the Water Industry. Benefitting from over 3 decades of trading, this business has built a solid and long standing client base comprised of prominent UK utility comp...
An opportunity has arisen to acquire a reputable IT support and development services provider with a UK-wide client base and a proven record for innovation and resilience in the constantly evolving IT sector. Throughout its 25+ year trading history,...
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.