AG Barr, Britvic set to merge soft drinks businesses
Soft drink rivals AG Barr and Britvic have signed a merger agreement to form a combined entity Barr Britvic Soft Drinks with annual sales of over £1.5bn.
The shareholders of Britvic and AG Barr will hold 63% and 37% respectively in the combined entity, which is expected to achieve aggregate, full run rate synergies of £40m in 2016.
The joint entity will have a portfolio of varied brands such as Irn-Bru, Robinsons, Fruit Shoot, J2O and Rubicon, representing key sub-segments of the soft drinks market.
Barr Britvic Soft Drinks will enjoy significant presence in France and Ireland, and growing distribution of proprietary brands in markets such as the US.
Current AG Barr CEO Roger White will be the new CEO of the combined group.
The legal headquarters of Barr Britvic Soft Drinks will be located at AG Barr's existing head office in Cumbernauld and operational headquarters will be located at Britvic's existing head office at Hemel Hempstead.
British drinks company Britvic has exclusive bottling and distribution agreements with PepsiCo in the UK for a number of brands including Pepsi, 7UP, Gatorade, Mountain Dew and SoBe, and for Pepsi, 7UP and Mountain Dew in Ireland.
The American beverage giant has agreed not to use any rights of termination in the event of a change of control under these agreements.