CMA opens investigation into Britvic and Carlsberg merger

The Competition and Markets Authority (CMA) has initiated an enquiry into the proposed £3.3b merger between Britvic and Carlsberg.

The Robinsons squash maker accepted the Danish brewer’s bid in July after weeks of negotiations between the two firms which saw Carlsberg’s two previous offers rejected.

The CMA has decided to investigate this transaction, considering whether the combined enterprise would “result in a substantial lessening of competition” within UK markets.

The government watchdog is now issuing a preliminary invitation to comment, to allow any interested parties to submit “any initial views on the impact that the transaction could have on competition in the UK”.

Those with concerns have until Tuesday 24 September to submit their comments.

This is the first part of the CMA’s information-gathering process, in advance of the government body’s formal investigation starting.

A spokesperson for Carlsberg said: “We believe that the combination of Carlsberg’s business with Britvic will create a highly attractive multi-beverage supplier, benefitting from an efficient supply chain and distribution network, and providing customers with a portfolio of market leading brands and leading customer service.

“The CMA’s invitation to comment is a standard step in its review of the transaction and was always fully expected. Following approval from Britvic’s shareholders last month, and subject to regulatory approvals and other outstanding conditions being satisfied, the transaction is expected to complete by Q1 2025.”

The deal values Britvic at £4.1b excluding debt. Carlsberg will pay Britvic shareholders 1,315p per share while they will also receive a special dividend payment of 25p per share.

The Danish brewer said it intended to create a single integrated drinks company in the UK, to be named Carlsberg Britvic, which would have a wide portfolio of beer and soft drinks brands including J20, Pepsi Max and Hobgoblin.

Carlsberg is also acquiring Marston’s 40% stake in its joint venture brewing business.

The brewing firm recently increased its earnings forecast for 2024 from 1%-4% organic operating profit growth to 4%-6%.

Image: Shutterstock