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Britvic cools AG Barr merger talk

Britvic cools AG Barr merger talk

The soft drinks company Britvic has said that it may renegotiate or even abandon its merger with rival firm AG Barr, after the deal was given a final approval from the Competition Commission.

Britvic, which is responsible for some of the UK's best known brands, such as Robinson's and Pepsi, has now issued a brighter forecast for its future, and is therefore questioning the benefit of entering a potential tie-up.

Britvic chairman, Gerald Corbett said that although the company would consider any forthcoming offer, it was now in a different position to when the merger came to fruition last summer.

Mr Corbett was especially full of praise for new chief executive Simon Litherland, whom he said had done a "fantastic job" in bringing forth his new plan for the company, and that the board was confident of driving £30 million of cost savings over the course of the next three years.

He also added that the company was looking ahead at possible opportunities for expansion in the international market.

He said: "In addition, performance has improved, the merger benefits are materially less than they were and our share price is almost twice the level it was."

However, AG Barr is still reportedly keen on the deal, and has dismissed any notion of a dramatic change in the situation.

The firm said in a statement: "The board will review all material new developments since the original merger terms were agreed but currently believes that, other than Britvic's recently announced short-term cost-saving plan, little has changed to alter its previous conviction that a merger represents a unique opportunity for value creation for both sets of shareholders in the short, medium and long term."

AG Barr has reportedly made it clear that it is only willing to renegotiate the terms of the merger, and is not looking to abandon the deal.

Under the terms of the original proposal, AG Barr shareholders would receive 37 per cent of the shares of the enlarged company, while Britvic shareholders would receive 63 per cent.

 

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