Britvic and AG Barr merger fizzles out

http://www.guardian.co.uk/business/2013/jul/11/britvic-ag-barr-merger-fizzles-out

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A planned merger between soft drink makers Britvic and AG Barr has collapsed after Britvic rejected a new proposal from its smaller rival.

AG Barr, the maker of Irn-Bru, and Britvic, behind the Robinsons and Tango brands, had agreed an all-share merger in November that lapsed in February when Britain's competition watchdog launched an investigation.

The Competition Commission provisionally cleared the deal in June before giving official approval on Tuesday.

AG Barr said following Britain's competition watchdog decision to clear the merger in July, it had made a revised proposal to Britvic which was on more favourable terms for Britvic shareholders than a previous one.

"The Board of Britvic has rejected this proposal. As a result AG Barr confirms that it does not intend to make an offer for Britvic," AG Barr said in a statement.

Shares in Britvic, which have risen almost 74% over the past year, were down 2.3% while Barr shares were up 1.6% on Thursday afternoon.

Britvic has signalled that it had become less enthusiastic about resurrecting the deal after the delay gave it time to step up expansion into overseas markets such as the United States, India and Spain. It also launched plans to cut costs, making possible savings from the merger less important.

"While we are disappointed that the opportunity to create significant value for both sets of shareholders has been rejected, the board of AG Barr has every reason to be confident of its position as a standalone company," AG Barr's chairman Ronnie Hanna said in a statement.

Under the original terms, investors in Britvic would have owned 63% of the combined group, while AG Barr shareholders would have owned the rest. AG Barr did not say what the revised proposal entailed.

The two together would have been worth about £1.9bn pounds, based on current market values, compared with £1.3bn when talks first emerged last year.