UK – Britvic, a British soft drinks manufacturer, has announced the suspension of its share buyback program following takeover bids from Carlsberg earlier this month.  

The program, initially revealed on June 3, aimed to repurchase ordinary shares up to a maximum consideration of £75 million (US$95 million). 

The suspension comes after Britvic rejected two multi-billion-pound takeover bids from Carlsberg.  

The soft drinks group has notified investment bank Morgan Stanley to halt the buyback program, stating it will reassess the program’s recommencement if circumstances change. 

Carlsberg, in collaboration with PepsiCo, recently struck a deal regarding the UK and Irish bottling rights for PepsiCo’s products in the event of a successful acquisition of Britvic.  

Britvic had signed a 20-year franchise bottling agreement with PepsiCo in 2020, covering popular drinks such as Pepsi, 7UP, and Mountain Dew in Britain. 

Reports from The Times on June 21 indicated that Carlsberg is preparing a third bid for Britvic, valuing the company at $3.58 billion.  

Analysts at Jefferies noted that Carlsberg’s potential acquisition of Britvic could significantly extend its partnership with PepsiCo. They also suggested that this acquisition might prompt scrutiny of Carlsberg’s current Coca-Cola bottling agreements in Denmark and Finland. 

Carlsberg, one of the world’s largest brewers with a diverse portfolio including soft drinks, stated that acquiring Britvic would enable it to capture appealing long-term growth opportunities from Britvic’s comprehensive portfolio of leading brands. 

Carlsberg’s portfolio already includes soft drink brands such as Tuborg Squash Light in Denmark, Tuborg Soda in Greece, and Xixia in China. 

The second offer made by Carlsberg implied an enterprise value multiple of over 13 times Britvic’s adjusted EBITDA of £302 million (US$323.42M) for the twelve-month period ending March 31, 2024.  

Despite rejecting the offers, Britvic’s financial performance remains robust. In the first half of fiscal 2024, the company reported a 10.9 percent increase in revenue to £880.3 million (US$1.11 billion) for the six months ending March, driven by favorable pricing and product mix, alongside volume growth. 

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