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Barr Britvic merger gets board go-ahead

The creation of a new soft drinks giant named Barr Britvic Soft Drinks is now on course as the boards concerned have recommended a merger of their companies.

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Britvic merger with Barr will bring soft drinks brands together.

The new business will be formed out of Britvic Soft Drinks and AG Barr via an all share merger. The company is projected to deliver annual sales of £1.5bn while its expects cost savings of £35m.

It will own a portfolio of brands including Robinsons, Fruit Shoot, J2O, Tango, Irn Bru and Rubicon alongside a distribution agreement with Pepsi.

Barr Britvic Soft Drinks will have its operational headquarters at Britvic’s base in Hemel Hempstead. The management team will be led by the current AG Barr CEO Roger White with John Gibney, the current CFO of Britvic, as chief financial officer.

Gerald Corbett, the current Britvic non-executive chairman, will become the non-executive chairman of the group and Ronald Hanna, the current chairman of AG Barr, will become the non-executive deputy chairman. Britvic CEO Paul Moody will not be joining the company.

Corbett says: “The merger of A.G. Barr and Britvic will create a world class soft drinks company. The combination makes huge commercial and industrial sense, bringing together a host of iconic brands from Robinsons Squash to IRN-BRU, as well as from the strong stable of Pepsi beverage brands, with very little overlap.

“[The companies} … are a fantastic fit with complementary strengths in products, channels and geographies and we will benefit from very significant synergies. Together we will create a bigger, better and stronger business for our consumers, customers and shareholders for now and the future.”

The merger is subject to shareholder approval and clearance by the Office of Fair Trading.

There is no indication as yet of how the management teams, including the marketing departments, may be rationalised as a result of the merger.

Britvic has taken a hit to pre-tax profit this year after a recall of Robinsons Fruit Shoot and Fruit Shoot Hydro and anticipates an impact on next year’s revenue.

In July an update statement said that trading had also been damaged by “poor weather conditions and weak consumer sentiment” and the company now expects 2012 operating profit to be in the region of £111m.

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