The proposed merger of UK-based soft drink giants AG Barr and Britvic has received provisional clearance from the Competition Commission (CC) of the UK.
The commission reviewed the context of the potential transaction and said that the brands owned by Britvic, which include Robinsons, Fruit Shoot, Tango and Pepsi, and those of AG Barr, such as IRN-BRU, Orangina, KA and Rubicon, were not close competitors.
The public body added that the possible merger is not expected to result in a substantial lessening of competition.
CC Deputy Chairman and Barr/Britvic inquiry group chairman Alasdair Smith said that they have concluded that customers will not lose from this merger.
"Carrying out a full investigation gave us the chance to look in detail at consumer preferences," Smith added.
"These told us that most consumers tend to see Barr and Britvic brands as distinct products rather than as close substitutes for each other.
"Looking at consumer preferences and other evidence, we were able to conclude that the proposed merger was unlikely to substantially lessen competition."
Britvic chairman Gerald Corbett said that the company will await for Competition Commission's final conclusions by the end of July.
"Our company is in a different place to last summer when the terms of the merger were agreed. The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally as well as in the UK. These are among the issues the board will reflect on in August once the Competition Commission's conclusions are known in order to ensure that it acts in the best interests of Britvic's shareholders," Corbett concluded.
