The boards of A.G. Barr and Britvic have responded to the decision by the UK’s Office of Fair Trading to refer the proposed merger of the two companies to the UK’s Competition Commission, saying that they continue to believe that the merger will not result in a substantial lessening of competition.
However, following the OFT’s announcement, Britvic – widely seen to be the primary beneficiary of the deal – saw its share decline by over 7%. A.G. Barr’s shares fell by around 2.5%.
Analysts noted that a merger would leave Coca Cola as the only remaining significant player in the UK soft drinks market.
In a statement, the companies said:
“The Boards of A.G. Barr and Britvic therefore intend to work together with the Competition Commission during its investigation with a view to seeking clearance of the proposed merger. The Competition Commission's investigation is expected to take approximately six months. If clearance is received from the Competition Commission on terms satisfactory to both A.G. Barr and Britvic, the Boards of A.G. Barr and Britvic will each reconsider, at that time, the terms of a possible merger between A.G. Barr and Britvic. There can be no certainty or assurance that, following such clearance, any such merger would be forthcoming or that any offer will be made by either A.G. Barr or Britvic.
A.G. Barr and Britvic consider there to be compelling rationale for clearance. The view of the two Boards on the benefits of the transaction is unchanged and they continue to believe that it is in the interests of the two shareholder groups. A.G. Barr and Britvic will continue to work closely with the authorities to expedite clearance.”
