Danish brewing giant Carlsberg has announced its acquisition of soft-drinks manufacturer Britvic in a £3.3bn deal. The merger aims to achieve approximately £100m in savings over five years through supply chain, procurement, and administrative efficiencies.
A Strategic Move for Carlsberg
Carlsberg’s acquisition of Britvic is a strategic move that aims to combine Britvic’s high-quality soft drinks portfolio with Carlsberg’s robust beer portfolio and route-to-market capabilities. This merger is expected to enhance the company’s proposition across the UK and other Western European markets. The deal is immediately earnings accretive and is expected to be value-accretive in the third year.
Implications for Distribution and Logistics
The acquisition raises questions about the future of Britvic’s current contracts with Eddie Stobart and Wincanton, who manage Britvic’s UK transport operations and Lutterworth NDC warehouse respectively. Carlsberg, which currently has XPO managing over 400 million litres of its beer per year in the UK, is reportedly exploring how best to combine these distribution functions to improve their reach and effectiveness.
Carlsberg’s Brewing and Distribution Capabilities
As part of the Carlsberg Marston’s Brewing Company (CMBC) joint venture, Carlsberg owns and operates three breweries and the largest distribution and logistics network amongst UK brewers. With 15 nationwide depots, it services around 7,000 independent direct customers across the UK and moves 16% of UK draught beer volumes. In 2021, CMBC consolidated its secondary logistics network into a single in-house solution for customers.
Future Plans and Partnerships
Carlsberg Group chief executive Jacob Aarup-Andersen expressed excitement about expanding their global partnership with PepsiCo, believing that the long-term opportunities will be beneficial for both companies. Britvic has an exclusive licence with PepsiCo in Great Britain and Ireland to make and sell Pepsi Max, 7UP, Rockstar Energy, and Lipton Ice Tea. PepsiCo Europe chief executive Silviu Popovici welcomed the deal, looking forward to building on their successful partnerships with both Carlsberg and Britvic.
