Up to 500 staff will lose their jobs over the next three years after AG Barr's £1.5bn merger with struggling Britvic, the two companies admitted today.
The deal, which brings together brands such as Irn-Bru, Rubicon, Fruit Shoot and Robinsons, will create one of Europe's biggest soft drinks companies with a 14 per cent share of the UK market.
The £35m in annual savings pencilled in as a result of the deal will see 8-12 per cent of the two firms' combined 4,300 staff lose their jobs.
AG Barr's chief executive Roger White, who will lead the new company, said the jobs will go in "corporate activity" – likely back-office staff and management – but he declined to elaborate further. "What we are creating here is something that will create strong growth over the long term," he said.
The new company will be called Barr Britvic Soft Drinks, with current Britvic investors holding 63 per cent of the shares and AG Barr investors 37 per cent. But current Britvic chief executive Paul Moody will leave the group following a disastrous spell for the business, which was forced to recall its Robinsons Fruit Shoot bottles in the summer at a cost of £25m due to a problem with the cap.
Britvic traces its history back to the mid-19th century when it began trading as the British Vitamin Products Company, although it started selling them under the Britvic name in 1949.
The Scottish firm AG Barr was founded in 1875 and began selling its Irn-Bru drink more than a century ago.
The tie-up will help AG Barr's push into the south.
Canaccord Genuity's analyst Wayne Brown said: "The combination has compelling commercial and industrial logic."
Gerald Corbett, Britvic's chairman, said: "The merger of AG Barr and Britvic will create a world class soft drinks company. We will create a bigger, better and stronger business for our consumers, customers and shareholders for now and the future."
AG Barr has been a soft drinks businesses since 1875, with its biggest brand being Irn-Bru, which is seen by many as part of Scottish culture.