Carlsberg (CARLb.CO) announced on Monday that PepsiCo (PEP.O) has agreed to waive a change of control clause in its bottling agreement with Britvic (BVIC.L), potentially clearing the path for Carlsberg to revise its $3.9 billion bid for the British soft drinks maker. This development follows Britvic’s rejection of two previous acquisition attempts by the Danish brewer.
The waiver from PepsiCo would only come into effect if Carlsberg’s acquisition of Britvic, which has the approval of Britvic’s board, proceeds to completion. The change of control clause typically provides protection to a party in an agreement if the controlling interest of the other party changes hands.
Britvic, known for its brands like Robinsons and R. White’s lemonade, signed a 20-year franchise bottling deal with PepsiCo in 2020 for brands such as Pepsi, 7UP, and Mountain Dew in the UK.
Carlsberg stated that it is currently assessing its position and emphasized that there is no certainty that it will make a formal offer. Analysts from Jefferies highlighted that an acquisition of Britvic by Carlsberg could significantly expand the partnership with PepsiCo, potentially leading to a review of Carlsberg’s current Coca-Cola bottling agreements in Denmark and Finland.
Following the announcement, shares of Britvic surged as much as 10% to reach an all-time high of 1,207 pence in early trading, indicating market optimism about the potential deal. In contrast, Carlsberg’s stock saw a slight decline of 0.26%.
Carlsberg has until July 19 to decide whether to proceed with a formal bid for Britvic or to withdraw its acquisition efforts. The outcome of this decision will likely have significant implications for both the companies involved and their respective market positions in the beverage industry.
