500 jobs go after AG Barr's £1.5 billion merger with struggling rival Britvic
Wednesday 14 November 2012
Up to 500 staff will lose their jobs over the next three years following AG Barr’s £1.5 billion merger with struggling rival 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% share of the UK market.
The £35 million in annual savings pencilled in as a result of the deal will see 8-12% of the two firm’s combined 4,300 staff lose their jobs. AG Barr 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 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% of the shares and AG Barr investors 37%. 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 £25 million 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 under the Britvic name in 1949.
Scottish firm AG Barr was founded in 1875 and began selling Irn-Bru — renowned for being “Made in Scotland from girders” — more than a century ago.
The tie-up will help AG Barr’s push into the south, with its strength among smaller shopkeepers dovetailing with Britvic’s pub trade presence.
Canaccord Genuity analyst Wayne Brown said: “The combination has compelling commercial and industrial logic.”
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