Soft drinks firms Britvic and AG Barr in £1.4bn merger
Wednesday 14 November 2012
Drinks brands Robinsons squash and Irn-Bru are to be poured into the same company after their makers unveiled a £1.4 billion merger deal today.
Britvic and AG Barr said the proposed tie-up will create one of Europe's leading soft drinks firms with annual sales of more than £1.5 billion.
However, the merger will come at the expense of up to 500 jobs after the two companies forecast a reduction of between 8% and 12% in their combined headcount of just over 4,000 people.
Hertfordshire-based Britvic, whose brands include Robinsons, Fruit Shoot, R Whites and Tango, has around 3,300 staff. AG Barr, which dates back to 1875 and also makes Tizer and Rubicon, has just under 1,000 employees.
It was confirmed today that Britvic shareholders will own 63% of the new company - to be called Barr Britvic Soft Drinks - with AG Barr holding the rest. The deal is still subject to shareholder approval.
Barr, which is based at Cumbernauld, North Lanarkshire, has produced Irn-Bru from a secret recipe for more than 130 years.
Chairmanship of the company passed outside the family for the first time in 2009 when Robin Barr ended his 31-year tenure. He remains on the company's board as a non-executive director and is one of just three people to know the formula of 32 ingredients used in the drink.
The tie-up, which was first disclosed by the companies in September, is expected to generate £40 million a year by 2016 through savings in overheads and buying costs, as well as in supply chain and distribution benefits.
Pepsi, which has an agreement with Britvic for the bottling and supply of a number of its products including 7UP, is supportive of the deal.
The legal headquarters of the new company will be Barr's existing base at Cumbernauld, with the operational HQ at Britvic's Hemel Hempstead office. It is expected that Barr's plans for a new plant at Milton Keynes will be accelerated as part of the integration process.
Today's merger announcement added: "The directors of AG Barr and Britvic believe the net reduction in combined group headcount is likely to be in the range of 8% to 12%.
"The number of employees and locations affected will depend on the outcome of the integration planning and these changes will only come into effect as synergies are realised over the three years post completion."
AG Barr chief executive Roger White will lead the combined company, while Robin Barr will join the board as a non-executive director.
The current Barr business has won praise from City analysts for its performance after increasing sales of Irn-Bru away from its Scottish heartland.
In contrast, Britvic has endured a challenging 2012 after recalling packs of Robinsons Fruit Shoot due to problems with a new cap design.
Chief executive Paul Moody, who has led the business since October 2003, will not switch to the combined company.
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