Corbett’s lack of thirst will stick in the throat

 
Elizabeth Fournier

WHILE AG Barr has been waiting patiently for the nod from the regulators, it looks like Britvic has moved on.

New broom Simon Litherland – who replaced former CEO Paul Moody in February – has swept in with promises of £30m in cost cuts over the next three years and global expansion. With Barr’s Roger White pencilled in to lead the firm under the original terms, suddenly a merger doesn’t seem quite so necessary to keep things fizzing along nicely.

But yesterday’s comments are still a surprising turnaround from chairman Gerald Corbett, who less than four months ago said the tie-up was still in the best interests of all involved.

Perhaps Corbett is playing hardball because since then, aside from the management reshuffle, little has changed. There are still compelling reasons for this merger to go ahead.

Britvic may be slashing costs but it still has more than £500m of debt and £250m in pension liabilities on its books – while its volumes are declining across the board. It’d be a shame to throw away a chance to see significant synergies come through over a potential boardroom bust up.

But it’s not all bad news for thirsty investors. The Office of Fair Trading may have taken the fizz out of this deal when it referred it to the Competition Commission, but yesterday’s news has given a welcome nod to the sector that M&A is back on the menu. Expect some interesting cocktails to be created soon.