Carlsberg buys Britvic for £3.3 billion

Soft drinks maker Britvic, owner of mixer brand London Essence Company, has agreed to a £3.3 billion ($4.2 billion) takeover offer from Danish brewing giant Carlsberg.

Britvic London Essence CompanyBritvic London Essence Company
The London Essence Company received a redesign this year

The boards of Carlsberg and the British company Britvic have agreed on a recommended cash offer to buy the soft drinks manufacturer.

Britvic, based in Hemel Hempstead, had previously rejected takeover offers from Carlsberg on the grounds that they undervalued the company.

The London Essence Company was founded in 2016 by Britvic-backed incubator WiseHead Productions. In 2022, it became the fastest-growing blender company in the UK, with retail sales of almost £15 million ($18 million).

In the UK, London Essence is the third largest mixer brand after Schweppes and Fever-Tree. Earlier this year, London Essence announced a rebranding and a new can format.

Britvic’s soft drinks portfolio includes Robinsons, Tango, Fruit Shoot and J20. The company is also PepsiCo’s main partner in the UK and Ireland.

Carlsberg describes Britvic as one of the leading soft drinks manufacturers in the UK, Western Europe and Brazil.

The brewery described the deal as an “extremely attractive opportunity” for the company that will also support its growth ambitions.

The acquisition will expand Carlsberg’s bottling business in the Nordic region and “deepen and strengthen” the company’s presence in Western Europe, an important region for the brewery.

Jacob Aarup-Andersen, CEO of Carlsberg, said: “With this transaction we are combining Britvic’s high-quality soft drinks portfolio with Carlsberg’s strong beer portfolio and go-to-market capabilities, creating an enhanced offering in the UK and Western European markets.

“The proposed transaction is attractive for Carlsberg shareholders, supports our growth ambitions and will be immediately accretive to earnings and value in year three. We are pleased to be expanding our global partnership with PepsiCo and are convinced that the long-term opportunities will be of great benefit to both companies.”

“Growth opportunities in several beverage sectors”

The brewery plans to create a single, enlarged company called Carlsberg Britvic.

Ian Durant, non-executive chairman of Britvic, added: “Britvic is an outstanding business with a strong heritage built on its portfolio of much-loved family brands, long-standing customer relationships, well-invested supply chain infrastructure and a fantastic team across multiple markets.

“All of these factors have ensured a consistent track record for Britvic shareholders over an extended period of time. The proposed transaction creates an enlarged international group that is well positioned to capitalise on growth opportunities across multiple drinks sectors.

“In order to remain competitive at a time when the market is characterized by a trend of increasing consolidation among bottling partners, it is vital that the agreement between Carlsberg and PepsiCo provides the combined group with a strong platform for continued success.”