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🧃 Carlsberg’s thirsty for Fruit Shoots


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If you take just one thing from this email…

Carlsberg, a Danish beer company, wants to buy Britvic, a UK-based soft drink maker, for around £3 billion to expand beyond beer and boost its market share in the UK. However, Britvic holds an important contract to produce and sell PepsiCo products in the UK and Ireland, which could be terminated if Britvic is bought. Carlsberg has secured an agreement with PepsiCo to keep this contract if the acquisition happens, but Britvic has yet to accept Carlsberg's offer.


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🧃 Carlsberg’s thirsty for Fruit Shoots

Apple Juice Wedding GIF by ABC Network

Credit: Giphy

What's going on here?

Carlsberg, the Danish beer company, is trying to buy Britvic, a UK-based soft drink maker for around £3 billion — but Britvic keeps rejecting the offers.

Oh, and PepsiCo (the American fizzy drink giant) actually holds the key to the whole transaction.

Why does Carlsberg want to buy Britvic?

Initially, it seems like an odd match.

Carlsberg is known for beer — like San Miguel and, well, Carlsberg. And Britvic is known for soft drinks — like Tango and Robinsons squash.

But Carlsberg has its reasons for this acquisition:

  • 📈 Increase its market share: Carlsberg wants to boost its market share in the UK by expanding beyond beer — the soft drinks market is a growing and profitable sector.

  • 🍺 Alcohol consumption is falling: With alcohol consumption on the decline, Carlsberg thinks soft drinks look like a good bet to maintain and grow its income.

  • 🥤 Britvic’s strong brands: Britvic is financially solid, with consistent revenue growth, making it an attractive target. It also owns well-known brands like Fruit Shoot as well as some trendy ones like Jimmy’s Iced Coffee, which appeal to younger customers.

But unless Carlsberg gets the green light from PepsiCo (a completely unrelated company), this whole deal falls down.

What has PepsiCo got to do with this?

So PepsiCo is based in the US and Britvic is based in the UK.

Britvic holds the exclusive license to manufacture, sell, and distribute PepsiCo products in the UK and Ireland. This means Britvic produces PepsiCo products like Pepsi, 7up, and Mountain Dew to sell here.

Now, that’s a *super* valuable contract for Britvic and one that Carlsberg will want to keep if it buys Britvic.

But the licensing agreement between PepsiCo contains a "change-of-control” clause.

The way this works is that if Britvic is bought by another company or undergoes a significant change in ownership (or “change of control”) then PepsiCo can terminate the contract.

This clause exists to protect PepsiCo — if a company it doesn’t know or trust takes over Britvic, PepsiCo might not think the new owner can maintain the quality it expects. So, if Britvic were to get bought, the clause gives PepsiCo the chance to leave the agreement and find a new partner that they prefer.

So, what happens to the PepsiCo deal if Carlsberg buys Britvic?

Technically, if Carlsberg buys the company, PepsiCo can leave. This would be a huge blow to Carlsberg (some people think the PepsiCo agreement is the real reason why Carlsberg is even buying Britvic).

Carlsberg has been speaking to PepsiCo to get them to waive their "change-of-control” right to terminate the agreement.

And, it worked! 🎉

Earlier this week, Carlsberg reached an agreement with PepsiCo — they won’t terminate the agreement if Carlsberg buys Britvic.

PepiCo’s on board — so, what’s next?

Carlsberg still has to get Britvic to accept an offer (Britvic rejected the latest offer of £3.1 billion).

The beer company now has until 19 July to announce a firm offer, or walk away from the deal.

But Carlsberg will probably come up with a sweeter offer which Britvic will eventually accept — especially now it’s got the assurance from PepsiCo.

How did markets react to Carlsberg’s bid?

The Carlsberg bid set Britvic shares racing.

Britvic shares surged by as much as 10% in early trading on Monday.

Which law firms are involved?

Linklaters is acting as legal adviser to Britvic, and Carlsberg’s legal representative is Baker McKenzie.


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  • 💻 The EU has charged Apple and Microsoft with breaking tech rules. This move is part of the EU’s Digital Markets Act, which aims to stop big tech from dominating the market and give smaller companies a fair chance. Apple is accused of blocking developers from directing customers to cheaper buying options outside its App Store. If guilty, Apple could face fines up to 10% of its global revenue, which could be tens of billions. For Microsoft, it’s the first antitrust charge in over a decade. The EU says bundling the Teams app with Office is anti-competitive.

  • 💡 Ashurst is rolling out its first generative AI tool, Harvey, to over 4,000 lawyers and staff worldwide. After a global trial and pilot, the firm plans to use Harvey for tasks like document review, due diligence, drafting, and market research. Ashurst’s chief digital officer, Tara Waters, emphasised the importance of AI, stating that it’s here to stay. This rollout sets Ashurst apart as the first international firm to implement AI tech across all offices from day one.

  • 🐟 Norwegian salmon giants are facing a UK price-fixing claim. Those named are accused of inflating prices for farmed Atlantic salmon over several years. The UK law firm Simmons & Simmons filed the class action for £382 million on behalf of British consumers. The claim says these companies colluded to raise prices, making shoppers pay up to 20% more between 2015 to 2019. If the lawsuit succeeds, UK consumers could get significant compensation.

  • 🏥 Burges Salmon advised US healthcare client AOTI on its £140 million listing on AIM. AOTI, a market leader in specialist wound care technology, raised £35 million from this IPO — which is the largest IPO on AIM by amount raised since December 2021. The CEO of AOTI said "This successful float means that we can expedite our commercial expansion and will be crucial in enabling us to further aid those with chronic conditions in living their lives to the fullest."

  • 🤝 Aareal Bank and Advent International are selling Aareon (a software provider for the property industry) for €3.9 billion. After the sale to TPG and CDPQ, Aareon, will become an independent company, with TPG as the majority owner and CDPQ as a minority co-investor. The deal, expected to close in the second half of 2024, will result in a €2 billion gain for Aareal Bank. Kirkland & Ellis advised the buyers, TPG and CDPQ. Weil represented Advent International and CMS advised Aareal.


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