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PepsiCo plans to sell stake in its UK bottler Britvic

Published 29 May 2017

Beverage giant PepsiCo is planning to sell its 4.5% stake in the UK-based soft drinks company Britvic.

US-based PepsiCo held Britvic’s 11.8 million ordinary shares through its subsidiary Tropicana United Kingdom.

The sale is expected to be implemented via an accelerated bookbuild placement with institutional investors

PepsiCo plans to raise about £85m through this sale, which is part of the company’s plans to reduce costs of about $5bn over a period of five years.

Britvic is PepsiCo’s bottler and distributor in the UK and Ireland. It manufactures and sells its own portfolio of brands.

The sale, as per PepsiCo, is part of its routine review of asset portfolio and claims that it does not impact the soft-drink company’s longstanding and valued bottling relationship with the British company.

PepsiCo's Europe Sub-Saharan Africa business CEO Ramon Laguarta said: "Britvic has been a terrific bottling partner since 1987 and we look forward to the continuation of this mutually beneficial relationship. 

"The combined capabilities of Britvic and PepsiCo are valued by our respective consumers, customers and shareholders and this decision will not impact our bottling arrangements."

Britvic CEO Simon Litherland said: "The relationship between Britvic and PepsiCo is longstanding and has been mutually beneficial to both parties.

“We have been the sole bottling partner for PepsiCo in Great Britain for the last 30 years and in that time, we have delivered significant growth for PepsiCo, led by Pepsi Max, and successfully expanded our bottling agreement into new categories.

“Both Britvic and PepsiCo are committed to continuing to build on the success we have achieved to date into the future."

Citigroup Global Markets is acting as the sole bookrunner for the sale. The placing price and number of placing shares to be sold will be agreed by Citi and PepsiCo during the close of the bookbuild process.

PepsiCo stated that Britvic will not receive any proceeds from the sale.

Image: PepsiCo plans to sell its stake in Britvic. Photo: Courtesy of PepsiCo, Inc.