AG Barr and Britvic in merger talks

The company behind Irn-Bru - dubbed Scotland's other national drink - today confirmed talks over a possible £1.4 billion merger with Tango maker Britvic.

AG Barr, which dates back to 1875 and also makes Tizer and Rubicon, said the discussions were at an early stage after it approached its Essex-based rival Britvic about a potential tie-up.

The pair said a merger deal would create one of the leading soft drinks companies in Europe, with other brands including the Britvic products Robinsons, J2O and Fruit Shoot.

It has already been agreed that Britvic shareholders will own 63% of any new company. Shares in both companies fizzed today, with Britvic worth £890 million after a 12% rise and AG Barr up 4%, valuing it at £500 million.

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 as chairman. 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 business started in 1875 when Mr Barr's great-grandfather Robert Barr embarked on a new direction for the family cork-cutting business by producing and selling "aerated waters", as soft drinks were called at the time.

Andrew G Barr first began selling "Iron Brew" in 1901 and shrewd marketing quickly saw the company rise to become Scotland's top soft drinks seller.

When Robert Barr took over the firm in 1947, he renamed the drink Irn-Bru after worries about new food labelling regulations - the drink did contain iron but was not brewed.

The current business has won praise from City analysts for its performance after increasing sales of Irn-Bru away from its historical heartland.

PA