Britvic and AG Barr gear up for £1.4bn deal

Michael Bow
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TANGO soft drink maker Britvic yesterday revealed it had been approached by AG Barr, maker of Scottish staple Irn-Bru, in a plucky bid to merge the two beverage firms.

AG Barr, which is much smaller than Britvic with revenues of £237m versus £1.3bn, said yesterday there was a “compelling industrial logic” for the plan.

The proposal, which stock analysts said appeared “well developed”, would see Britvic shareholders own 63 per cent of the new business and AG Barr shareholders take 37 per cent.

A new board of directors has already been drawn up, with AG Barr chief executive Roger White set to take on the role of chief executive at the combined group. Two sources familiar with the situation yesterday said they expected current Britvic chief executive Paul Moody to leave the company.

The proposal to put Britvic on the block could also lead to interest from PepsiCo, which has licensed its franchise to Britvic in the UK, and private equity firms, to buy the company.

Britvic has been under the cosh this year after it was forced to put out a profit warning in July following a recall of its Fruit Shoot drinks brand which cost the company up to £25m.

The move by AG Barr, which has been called “opportunistic” by analysts, would help it crack markets south of the border using Britvic’s supply network in England and Wales.



Britvic is being advised by one of the big beasts of the M&A jungle – David Wormsley from Citi. Known as “The Worm” in financial circles, he is one of the top M&A bankers in the City, having been linked with enormous deals including Ferrovial’s £10bn purchase of BAA and a £41bn restructuring at Shell. He was also responsible for leading Citi as joint global co-ordinator and bookrunner on the Glencore listing in 2011. Most recently he popped up leading the official advisory team for Glencore alongside Morgan Stanley’s Michael Antakly in the Xstrata deal. Once upon a time Wormsley was Guy Hands’ financial adviser and used to take shooting holidays with him and his family. But the two fell out over a dramatic court dispute when Hands lost a multibillion-dollar lawsuit after he tried to claim Wormsley tricked him into buying EMI. Luckily for Britvic, Wormsley is known as a fierce negotiator. In an email to Hands in 2006 he told his old friend: “I am incapable of not trying to get you to the best possible outcome.” AG Barr is being advised by a team from Rothschild led by Akeel Sachak. He has worked on the sale of Scottish & Newcastle to Heineken and Carlsberg as well as the recent acquisition of Rank Hovis McDougall by Premier Foods.